HC 105 
.C26 
1866 
Copy 1 



MISCELLANEOUS 
WORKS 

OP 

HENRY C. CAREY, 

AUTHOR OF " PRINCIPLES OF SOCIAL SCIENCE," ETC. ETC. 



PHILADELPHIA: 

HENRY CAREY B A I R D, 

INDUSTRIAL PUBLISHER, 
406 Walnut Street. 

1865. 



^2 THE 



HAEMONY OF INTERESTS. 



AGRICULTURAL, MANUFACTURING, 



COMMERCIAL. 



By HENRY C. CAREY. 



PHILADELPHIA: 
HENRY CAREY BAIRD, 

INDUSTRIAL PUBLISHER, 
406 WALNUT STREET. 
1865. 



XNTSRKD, ACCOBBI1.-3 TO ACT OF 0ONORS88, IN THE TEAR 1852, BY 

MYRON FINCH, 

I» TBI CLERK'S OFFICE OF THE DISTRICT COURT Of THE UNITED STATES FOR THE 
SOUTHERN DISTRICT OF KIW-TOBI. 



PREFACE. 



Tiik tandency of the whole British system of political economy is to the production 
of discord among men ;uul nations. It is based upon the Ricardo and Malthusian doc- 
trines of rent and population, which teach that men every where commence the work of 
cultivation on the rich soils of the earth, and that, when population is small, food is 
abundant; but that as numbers increase, men are forced to resort to poorer eoils, yielding 
steadily less and less in return to labor. As a neee.-siry consequence of the increasing 
scarcity of fertile soils, it is held that with tliis diminishing return, the laud-holder is 
enabled to take a larger proportion of the proceeds of labor, thus profiting at the cost 
of the laborer, and by reason of the same causes which tend to the gradual subjugation 
of the latter to the will of his master. Here are, of course, lying at the very founda- 
tion of the system, discordant interests, and this discord is found in every succeed- 
ing portion of it. Over-population is held to be a result of a great law of nature, in 
virtue of which men grow in numbers faster than can grow the food that is to nourish 
them; and the poverty, vice, and crime that everywhere exist, are regarded as necessary 
consequences of this great law, emanating from an all-wise, all-powerful, and all merci- 
ful Being. "War, famine, and pestilence are regarded as means provided by that Being 
for restraining population within the limits of subsistence. Charity is regarded as 
almost a crime, because it tends to promote the growth of population. The landlord 
excuses himself for taking large rents, on the ground that it is a necessary consequence of 
the natural tendency of man to increase in numbers with too great rapidity. The stock- 
holder of the East India Company, who luxuriates upon the produce of his stock, 
regards it as one of the natural consequences of this great law that he should receive, as 
rent, so large a portion of the proceeds of labor applied to cultivation, as to leave to 
the poor cultivator but half a dollar per mouth out of which to supply himself and his 
family with food, raiment, and shelter; and excuses himself to his conscience, on the 
ground that it is a necessary result of great natural laws. Capital cannot become more 
productive, except at the cost of labor ; nor can wages rise, except at the cost of capital. 

Among the consequences of this great law of discords, promulgated by Malthus and 
Ricardo, is found the idea that, if men would prosper, they must live apart from each 
other. The rich lands of England are, as it is said, already occupied, and those who would 
find rich lands must fly to America or to Australia, there to produce food and raw 
materials with which to supply the market of England ; and thus it is that that country 
seeks to establish a system of commercial centralization, that is — as was so justly said, 
seventy years since, by Adam Smith — a manifest violation of " the most sacred rights of 
mankind." That great man was fully possessed of the fact that, if the farmer or planter 
would flourish, he must bring the consumer to his side ; and that if the artisan would 



IV PREFACE. 

flourish, he must seek to locate himself in the place where the raw materials were grown, 
and aid the farmer by converting them into the forms fitting them for the use of men, 
and thus facilitating their transportation to distant lands. He saw well, that when men 
came thus together, there arose a general harmony of interests, each profiting his neigh- 
bor, and profitiug by that neighbor's success, whereas the tendency of commercial cen- 
tralization was toward poverty and discord, abroad and at home. The object of pro- 
tection among ourselves is that of aiding the farmers in the effort to bring consumers 
to their sides, and thus to carry into effect the system advocated by the great author of 
The Wealth of Nations, while aiding in the annihilation of a system that has ruined 
Ireland, India, Portugal, Turkey, and all other countries subject to it ; and the object of 
the following chapters is that of showing why it is that protection is needed ; how it 
operates in promoting the prosperity of, and harmony among, the va-ious portions of 
society ; and how certain it is that the true, the profitable, and the onlt means of 
attaining perfect freedom of trade, is to be found in that efficient protection which 
shall fully and completely carry out the doctrine of Dr. Smith, in bringing the loom and 
the anvil to take* their natural places by the side of the plough and the harrow. 



INDEX. 



Advantage of bringing machinery to the cot- 
ton, page 145. 

African cotton, attempts to raise, 174. 

Agricultural labour in England, 155. 

Americana responsible for the wars of Eng- 
land, 197. 

Baltimore and Ohio railroad tolls. 24. 
and Ohio railroad tolls, diagram of, 

35. 

Brazil, supply of cotton from, 170. 
British commerce ruinous to Ireland and In- 
dia, 71. 

efforts to underwork all other nations, 

54. 

imports and exports, 56. 

legislation upon imports and exports, 

• 53. 

slave history disgraceful, 169. 

system and protection contrasted, 72. 

causes poverty in the producer, 101. 

endeavours to maintain monopoly of 

machinery, 101. 

Bullion and specie should be included in Ta- 
riff tables, 7. 

Canada and Cuba, objections to their annexa- 
tion, 62. 

form of its commerce, 99. 

ruined by free trade, 99. 

Canadian desire for annexation, 62. 

desire for annexation, its cause, 99. 

exports, 91. 

independence would stop immigration 

in the United States, 73. 

produce sent to England, 22. 

Capital and labour wasted in transportation, 

146. 

who suffers by its waste, 192. 

Capitalist, how affected by protection, 141. 

small, ruined by fluctuations occasioned 

by the British system, 199. 

Cheap labour, 130. 

China, manufacture of. 26. 

Chinese system of trade, 134. 

Clothing, power to obtain, in exchange for 
labour, 16, 40. 

power to obtain, increases under pro- 
tection, 16. 

< price of, is really very high, 111. 

Coal, consumption of, 13, 33. 

, rate of its consumption under the Tariff 

of 1828, 85. 

r price of, reduced with increased pro- 
duction, 14. 

......... production and consumption of, in- 
crease and diminish together, 14. 



Coffee, consumption of, 28, 38. 

abolition of duties on, 30. 

Colonial system presents combination of ac- 
tion, 95. 

system depresses the price of cotton, 99. 

manufactures, object of prohibiting, 

131. 

Colonies of England, their consumption of cot- 
ton, 110. 

Colonization, British system of, 64. 
Combination diminished by emigration, 94. 

impossible in a state of poverty, 87. 

increases population, 88. 

increases value of labour, 86. 

needed in this country, 52. 

of labour, strikes, <fec, 161. 

Commercial policy, review of our, 10. 
Commerce decreases under free trade, 73. 

definition of, 67. 

increases under protection, 72. 

internal, 23. 

power to maintain external, 39. 

power to maintain internal, 39. 

tends to produce equality of condition, 

153. 

Communism among nations produced by po- 
licy of England, 154. 
Compromise Act, 3. 
its operation, 5. 

Concentration needed to make labour produc- 
tive, 89. 

Condition of English people, 154. 

of man improved by increase of pro- 
ductive power, 78. 

Consumer should live near the farmer, 96. 

Consumption equals production, 45. 

grows with power of production, 23. 

of foreign products decreases under 

free trade, 42. 

not arrested by high prices, 116. 

power of, decreases as the producers 

are more and more distant from mar- 
ket, 87. 

Conversion and exchange, doctrine of, 46. 

how maintained in England, 63. 

increases man's necessities, and di- 
minishes his powers, !?3. 

tends to destroy labour and capital, 

150. 

Cotton, comparative consumption of, under pro- 
tection and free trade, 110, 114. 

comparative prices of crop and cotton 

goods in Liverpool, from 1843 U 
1847, 137. 

decrease in its cultivation, 103. 

decrease in its price, 114. 

diagram of imports of foreign, 36. 



vi 



INDEX. 



Cotton, does not increase in supply for want of 
a market, 121. 

fluctuations in price of, 116. 

production of the world, 59. 

Px-ussian imports of, before the Z olive- 
rein, 107. 

return for, consumed in England, 58. 

statement of crop and consumption of 

American, 106. 

speculation in India a failure, 111. 

supply of, to Britain falling off, 179. 

trade between the United States and 

England, 114. 

weekly consumption of, in Great Bri- 
tain, 175. 

where the best is raised, 105. 

goods, 110. 

goods and vara exported to India from 

England," 103. 
and twist, prices from 1844 to 1848, 

117. 

consumption of, 15, 33. 

consumption of, under free trade, and 

under protection, 16. 

dearest when cotton is lowest, 117. 

import of, 15. 

imported into Canada from England, 

99. 

Credit, public, 31, 39. 

Cultivator, his gradual operations with the 
land, 123. 

Currency, how affected by protection, 185. 

Debt created by importations, 26. 

foreign, 37. 

public, 31, 38. 

Dependence on England a cause of non-con- 
sumption of iron, 83. 
Depopulation, present tendency to, 20. 
diagram of, 34. 

Disasters of 1836 to 1842, how produced, 188. 

present tendency to, 189. 

Duties of the United States, 227. 
Duty affects amount of importation slightly, 
26. 

Earth, a machine to be fashioned to man's 
purposes, 123. 

the only producer, 124. 

Earthenware manufacture, 26. 

East Indies, British supply of cotton from, 176. 

Effects of putting a factory or furnace in ope- 
ration, 43. 

of establishing manufactures in the 

South, 50. 

Egypt, British supply of cotton from, 170. 

Emigration from cotton states, 121. 

from Eastern states, 87. 

should be stopped, 121. 

westward, 20, 87. 

England in distress by reason of the dispro- 
portion of consumers to producers, 65. 

condition of inhabitants of, 109, 154. 

fixes the price of products of the far- 
mer, 141. 

real wealth of, 63. 

: result of dependence on, 60. 

English colonies continually want annexation, 
113. 

consumers and producers, 95. 

consumption of cotton, 107. 

consumption of cotton cloth, 117. 



English free trade disastrous to other nations, 
132. 

market for our cotton does not grow 

with its production, 180. 

school, its doctrines, 29. 

teaching of its opponents, 30. 

Exchanges, how affected by protection, 198. 
Exchangers, influence on pauperism, 81. 

producers make sacrifices to the, 101. 

Expenditure, public, 30, 38. 
Exportation of food, 81, 92. 
Exports, value of, 36. 

Farmer can get most clothing for his produce 
when the power of producing cloth is 
greatest, 21. 

exhausted by free trade, 73. 

how he may get the highest prices in 

foreign markets, 98. 

profit by emigration only under pro- 
tection, 98. 

sells in the cheapest market, and buys 

in the dearest, 81. 

suffers by non-production of iron, 80. 

Flax, manufacture of, 26, 37. 

Flour consumed in English cotton factories,lll. 

Food, product, export, and import of, 21. 

power to obtain in exchange for la- 
bour, 40. 

why supply of, increases faster than 

the demand, 97. 

why scarce in England, 57. 

Freedom of man increases with wealth and 

population, 162. 
Free trade among states, 3. 

approach to, creates debt, 23. 

approach to, is progress downward, 160. 

based on cheap labour, 130. 

doctrines about rights of man, 128. 

impoverishes the masses, 74. 

real, beneficial to all, 135. 

results, if introduced in the United 

States, 132. 

Freights should be included in valuation of 

exports, 8. 
French consumption of cotton, 122. 
productions, 139. 

productions imported into the United 

States, 27, 37. 
Friendship unknown in trade, 205. 
Fuel necessary to obtain iron, 78. 

Gibraltar, its use, 112. 

God and silver contribute little to man's ne- 
cessities, 190. 

Government, how affected by protection, 221. 

Grain dearer in coal regions than in Philadel- 
phia, 98. 

price of, would increase under protec- 
tion, 98. 
production of, 21, 35. 

Harmony of interests, 41. 

perfect throughout the whole union, 1 17. 

between planter, manufacturer, and 

ship-owner, 119. 
between land-owners and labourers of 

the world, 131. 
Home markets make highest prices, 16. 

Immigration affected slowly by change in Ta- 
riff, 19. 



INDEX. 



vii 



Immigration decreases under free trade, 28. 

diagram of, 34. 

diminishing at present. 20. 

effect on consumption, 130. 

effect on price of wheat, 96. 

should he encouraged, 121. 

stops with decreased combination of 

action, 94. 

results of, had it continued at the same 

rate as in 1834, 115. 
table of, 17. 

would raise price of man abroad, 116. 

Importation diminishes under free trade, 28. 

means of, 90. 

of men and merchandise, 90. 

of men reduces shipping prices, 93. 

of labour and iron, 81. 

under different tariffs. 9. 

Independence of England, advantages of, 97. 
India, commerce of, 103. 

attempts to raise cotton in, 103, 117, 

133. 

commerce of, 103. 

cotton exported from, to England, 104. 

ruined by dependence on England, 61, 

103. 

Individual credit, how affected by protection, 
213. 

Intellectual condition of man, how affected by 

protection, 209. 
Internal commerce, 23. 
Ireland, exports of, 91. 

importation of cotton into, 109. 

ruined by dependence on England, 61, 

103. 

Iron, abounding in America, 78. 

associated with production, 125. 

chief constituent of machinery, 7S. 

consumption of, 12. 32, 79. 

cost of, in labour, 12. 

domestic production of, 11. 

fluctuation in price of, 82. 

foundation of civilization, 73. 

non-production of, injures the producer 

of food, 80. 

power of importing, greatest under I 

protection, 13. 

production of, quadrupled by protec- 
tion, 83. 

quantity of, imported since 1S21, 10, 

11. 

Labour and capital wasted in transportation, 
149. 

best rewarded under protection; 28. 

gives value to land, 124. 

has smallest return where machinery 

of transportation is most needed, 153. 

power of, to obtain food, clothing, and 

the aid of machinery, 40. 

saved in New England, 48. 

tends to produce equality of condition, 

155. 

wasted in the Southern states, 49. 

Labourer, how affected by protection, 151. 
Labourers' common interest, 130. 
Lake tonnage, 24, 36. 

Land, a great saving fund, acquiring value 

from labour, 122. 

effect of sales of, on immigration, 20. 

more valuable in the United States 

than in Canada, 129. 



Land, public, 220. 

quantity of, sold, 20. 

value of, depends on cost of transporta- 
tion, 127. 
Land-owners in England, 129. 

in India, Ireland, Ac, 129. 

in Parliament, 132. 

remedy for their grievances, 130. 

Lead, consumption of, 31. 

production of, 18. 

Linens, importation of, 27. 

Louisville and Portland canal, trade on, 35. 

Machinery, increased facility of procuring, 
causes increased production of food, 
21. 

must be brought to the cotton, 144. 

object of, 78. 

of three kinds, 151. 

power to obtain in aid of labour, 40. 

required to render labour productive, 

151. 

Man the most valuable commodity, 94. 
Manufacture of small articles in the West, 51. 
Manufacturer's true interest, 136. 
Markets, the best for products are those made 

at home, 45, 139. 

wanted for producers, 122. 

Marriage regarded as a luxury in Europe, 128. 
Merchants are agents of the producers, 80. 
get the benefit of the producer's toil, 

81. 

Mission, true, of the United States, 227. 
Monopoly of machinery cause of the planter's 

poverty, 76. 
of machinery, effects of abolishing the, 

136. 

Morality, how affected by protection, 202. 

Nation, how affected by protection, 223. 
National credit, how affected by protection, 
218. 

Necessity for producers and consumers to live 

near each other, 96. 
New England, wages in, will rise when they 

increase in the South and "West, 153. 
New Orleans, trade of, 25. 

diagram of produce received at, 36. 

New York canal tolls, 24, 35. 

diagram of houses built in, 36. 

growth of, 25. 

Non-production of iron injures the producer of 
food, 80. 

Ore and fuel in Ohio and the "West, 78. 
Over-population, general pretext for the evils 
of a vicious system, 65. 

wrongly complained of in Europe, 129. 

Over-production and under-consumption, 103. 

Pauperism increases in free-trade countries, 
128. 

results from the English colonial sys- 
tem, 195. 

Pennsylvania canal tolls, 24, 35. 

Philadelphia, growth of, 25. 

Philadelphia, ratio of growth of, to the popu- 
lation of the Union, 36. 

Planters' advantages, if possessing their own 
machinery, 143. 

advantage to, arising from the an- 
nexation of Canada, 99. 



viii 



INDEX. 



Planters benefited by consumption of cotton at 
home, 116. 

impoverished by the speculations of 

exchangers, 76. 

need machinery to convert their own 

crops, 138. 

oppose their own interests, 169. 

tobacco and cotton, relative returns for 

their products, 119. 

true policy to break down English mo- 
nopoly of machinery, and bring Eng- 
lish machinery to the cotton field, 
185. 

why they receive small returns for their 

capital, 143. 

Population, diagram of, 33. 

of Philadelphia, 36. 

Portugal, causes of its poverty, 112. 

Powers of man increase as his necessities 
diminish, 192. 

Prices highest when a nation buys and sells 
at home, 14. 

Producer's returns in cotton cloth, 112. 

Production of food and iron unequal, 70. 

relation of, to commerce, 68. 

Productive power, diminution of, brings dis- 
cord and internal disorder, 194. 

Proportion of producers to consumers in Eng- 
land, 55. 

Protection, how it affects morals, 202. 

public credit, 217. u 

revenue and expenditure, 42, 219. 

the capitalist, 141. 

consumption of cotton, 108. 

currency, 185. 

exchanges, 198. 

friends of peace, 193. 

government, 221. 

growth of new states, 88. 

intellectual condition, 209. 

nation, 223. 

political condition, 213. 

power to import, 42. 

price of cotton, 114. 

slave and his master, 161. 

value of labour, 66: 

woman, 200. 

increases immigration and the number 

of consumers, 98. 

raises the value of man, 130. 

raises the value of land, 133. 

reduces prices, and increases the power 

of consumption, 41. 

saves cost of transportation, 141. 

why required, 51. 

Public credit, 31, 38. 

debt, 31, 38. 

expenditure, 30, 38. 

Railroads do not lessen the number of horses, 
127. 

increase production, 127. 

Return freights, 93. 

Returns for products, 43. 

Revenue from customs, diagram, 38. 

from imports, 28. 

decreases under free trade, 28. 

how affected by different tariffs, 29. 

how affected by protection, 219. 

Road from the Mississippi to the Pacific, 90. 

to be productive, must go through ricb 

countries, 89. 



Rothschild, his system of accumulating wealth, 
75. 

Russia wastes food for want of a market, 131. 

Russian exports, 91. 

system of commerce, 91. 

Saving-funds found in mills furnaces, and 
coal mines, 46. 

Settlers' life and experience, 126. 

Silver and gold contribute little to man's ne- 
cessities, 191. 

Ship-owner's true interest, 136. 

Shipping affected slowly by changes in tariff, 
19. 

built to replace vessels sent to Califor- 
nia, 19. 

built, tables of, 19, 34. 

increases with protection, 90. 

Slavery agitation, how best ended, 165. 

would be abolished by making a mar- 
ket on the land in the South, 164. 

Slave-history of England disgraceful to that 
nation, 169. 

Slaves have been well kept in the United 
States, 169. 

Northern men cannot afford to raise, 

163. 

Smuggling as regarded by British authorities, 
112. 

Soils, poorest, first cultivated, 29. 

South Carolina, her inability to produce cotton 

in competition with her neighbours, 

166. 

Specie and bullion should be included in Ta- 
riff tables, 7. 

imported and exported, 1S29 to 1849, 

9. 

Steamboat tonnage, 24, 34. 
Sugar, production, importation, and consump- 
tion of, 23, 35, 120. 
returns for, 120. 

Swords and muskets hinder returns to labour, 
193. 

Tariffs, outline history of, 3. 

merits of, require time for develop 

ment, 6. 

principal features of that of 1816, 5. 

1824, 5. 

1828, 5. 

1832, 5. 

1833, 5. 

1842, 5. 

1846, 5. 

of 1846, effects of maintaining it, 67. 

1828, effects that would have resulted 

from its continuance, 115. 
Taxation of the sugar planter, 76. 

increased by pauperism, 76. 

Tea, abolition of duty on, 30. 

consumption of, 28, 37. 

Tendency to produce only the finest cotton 

fabrics in England, 179. 
Tolls on internal commerce, 24, 35. 
Tonnage, increase and diminution of, 19. 

lake, 24, 36. 

steamboat 24, 36. 

Tobacco, consumption of, 119. 
Tobacco trade, 118. 
Trade of New Orleans, 24. 

New York, 25. 

Philadelphia, 25. 



INDEX. 



ix 



Trading with a poor people tends to reduce 
our wages to a level with theirs, 77. 

Transportation, costs of, reduce the value of 
land, 127. 

capital employed in, 143. 

United States, British supply of cotton from 
the, 171. 

exports of cotton from, to England, 

106. 

exports of grain from, to England, 

95. 

importation of men into the, 92. 

present policy of the, 134. 

receipts of cloth and iron from Eng- 
land, 113. 

true mission of the, 227. 

wealth of, in land, coal, and metals, 

128. 

Union between producers and consumers most 
profitable when made at home, 51. 

Value of exports, 25. 
of imports, 10. 



Variations in prices caused by dependence on 
England, 83. 

Wages, fall under free trade, 28. 

of labourers in England, 93. 

of labourers in Ireland, 94. 

process of reducing, 75. 

War, causes of recent, 193. 

on the labour and capital of the world 

prepared in England, 95. 
on what the power to make it depends, 

194. 

Wars of England, Americans responsible for 

the, 197. 
Western steamboat tonnage, 36. 
Woman, how protection affects, 200. 
Wool trade, 102. 
Woollens, consumption of, 33. 
importations of, 16, 37. 

Zollverein, cotton trade flourishing under its 

auspices, 107. 
imports into Prussia before and after 

its formation, 107. 



THE 



HARMONY OF INTERESTS: 



AGRICULTURAL, MANUFACTURING, AND COMMERCIAL. 



Why is protection needed? Why cannot trade with foreign nations be 
carried on without the intervention of custom-house officers ? Why is it that 
that intervention should be needed to enable the loom and the anvil to take 
their natural places by the side of the plough and the harrow ? Such are 
the questions which have long occupied my mind, and to the consideration 
of which I now invite my readers. 

Of the advantage of perfect freedom of trade, theoretically considered, 
there could be no doubt. The benefit derived from such freedom in the 
intercourse of the several States, was obvious to all ; and it would certainly 
seem that the same system so extended as to include the commerce with the 
various states and kingdoms of the world could not fail to be attended with 
similar results. Nevertheless, every attempt at so doing had failed. The 
low duties on most articles of merchandise in the period between 1816 and 
1827, had produced a state of things which induced the establishment of 
the first really protective tariff, that of 1828. The approach to almost per- 
fect freedom of trade in 1840, produced a political revolution, and a similar 
but more moderate measure, led to the revolution of last year. These were 
curious facts, and such as were deserving of careful examination. 

It may be assumed as an universal truth, that every step made in the right 
direction will be attended with results so beneficial as to pave the way for 
further steps in the same direction, and that every one made in the wrong 
direction will be attended with disadvantageous results tending to produce a 
necessity for a retrograde movement. The compromise bill, in its final stages, 
was a near approach to perfect freedom of trade, the highest duty being only 20 
per cent. Believing it to be a step in the right direction, one of the enthusiastic 
advocates of perfect freedom of trade proposed, soon after its passage, that, 
commencing w T ith 1842, there should be a further reduction of one per cent, 
per annum for twenty years, at the end of which time all necessity for custom- 
houses would have disappeared. With the gradual operation of the earlie. 
stages of that bill there was, however, produced a state of depression so 
extraordinary as to lead to a political change before reaching its final stages , 

3 



4 



THE HARMONY OF INTERESTS. 



and the duties had -scarcely touched the point of 20 per cent, before they 
were raised to 30, 50, 60, or more, by the passage of the tariff of 1842. 
With the election of 1844, the friends of free trade were restored to power, 
and two years afterwards was passed the tariff of 1846 — the free-trade 
measure — in which the revenue duty on articles to be protected was fixed 
at thirty per cent. Here was a retrograde movement. Instead of passing 
from twenty downwards, we went up to thirty, and thus was furnished an 
admission that so near an approach to free trade with foreign nations as was 
to be found in twenty per cent, duties had not answered in practice. Since 
then, it has been admitted, even by the most decided free-trade advocates, 
that on certain commodities even thirty per cent. w r as too low, and within 
six months from the date of the passage of the act of 1846, its author pro- 
posed to increase a variety of articles to thirty-five and forty per cent.* 
Here was another retrograde movement. It is now admitted that there are 
other articles the duties on which require to be raised, and daily experience 
goes to prove that such must be the case, or we must abandon some of the 
most important branches of industry. The tendency is, therefore, altogether 
backward. Thirty per cent, duty is now regarded as almost perfect freedom 
of trade, and instead, of proposing a further annual reduction, each year pro- 
duces a stronger disposition for a considerable increase. In all this, it is 
impossible to avoid seeing that there is great error somewhere, and almost 
equally impossible to avoid feeling a desire to understand it is that the 
approaches towards freedom of trade with foreign nations have so frequently 
failed, and why it is that every strictly revenue tariff is higher than that 
which preceded it. 

With a view to satisfy myself in regard thereto, I have recently made the 
examination, before referred to, of our commercial policy during the last 
twenty-eight years, commencing with 1821, being the earliest in relation to 
which detailed statements have been published. Before commencing to lay 
before you the results obtained, it may be well to say a few words as to the 
merits claimed by the two parties for their respective systems. 

The one party insists that protection is " a war upon labour and capital," 
and that by compelling the application of both to pursuits that would other- 
wise be unproductive, the amount of necessaries, comforts, and conveniences 
of life obtainable by the labourer is diminished. The other insists that by 
protecting the labourer from competition with the ill-fed and worse-clothed 
workmen of Europe, the reward of labour will be increased. Each has thus 
his theory, and each is accustomed to furnish facts to prove its truth, and 
both can do so while limiting themselves to short periods of time, taking at 
some times years of small crops, and at others those of large ones, and thus 
it is that the inquirer after truth is embarrassed.! No one has yet, to my 
knowledge, ever undertaken to examine all the facts during any long period 
of time, with a view to show what have been, under the various systems, 
the powers of the labourer to command the necessaries and comforts of life. 
One or other of the systems is true, and that is true under which labour is 
most largely rewarded : that under which the labourer is enabled to consume 
most largely of food, fuel, clothing, and all other of those good things for the 
attainment of which men are willing to labour. If, then, we can ascertain 
the power of consumption at various periods, and the result be to show that 
it has invariably increased under one course of action, and as invariably 
diminished under another, it will be equivalent to a demonstration of the 

* Treasury Report, Feb. 1, 1S47. 

\ A person employed in the preparation of government statistics inquired, on being 
asked to prepare some tables, what was to be the policy to be proved. "Why," said the 
ether, "could you prove both sides?" "Equally well," said he. 



THE HARMONY OF INTERESTS. 



5 



truth of the one and the falsehood of the other. To accomplish this, has 
been the object of the inquiry in which I have recently been engaged. 

It is necessary now to show what have been the distinguishing features 
of the several systems that have been in operation during the period to be 
examined. They are as follows : — 

First. The tariff of 1816 was a planters' and farmers' measure. Gotti n 
and coarse cotton cloths were carefully protected. Iron itself was well pro- 
tected, but almost all manufactures of iron, the commodities for the pro- 
duction of which pig or bar iron could be used, were admitted at 20 per 
cent. Wool paid 15 per cent. Blankets and woollen and stuff goods paid 15 
per cent., and finer goods 25 per cent., until 1S19, after which they paid 
but 20 per cent. Spirits paid a heavy specific duty, for the benefit of the 
farmers ; but paper, hats, caps, manufactures of leather, types, and manu- 
factured articles generally, paid only from 20 to 80 percent. Coal paid 5 cents 
per bushel, but the commodities in the manufacture of which coal was to be 
used paid ad valorem duties. Protection was thus given to the coarse 
commodities that least required it, and refused to those for the production 
of which the coarser ones were to be used. As a matter of course, its pro- 
tective features were totally inoperative. 

Second. That of 1824, under which iron was, as before, well protected, 
but manufactures of iron, and of metals generally, were admitted at 25 per 
cent. Wool was raised to 20 per cent., to increase, by successive stages, 
until it reached 30 per cent. Coarse woollens were fixed permanently at 
25 per cent. Finer ones were to rise gradually until they reached 33| per 
cent. Carpets paid from 20 to 50 cents per square yard. Hams paid 3, 
and butter 5 cents per pound. Potatoes 10, oats 10, and wheat 25 cents 
per bushel; while scythes, spades, shovels, and other things requisite for 
the raising of wheat and potatoes, paid 30 per cent. Spirits were carefully 
protected. Bolting cloths paid 15 per cent. Sail-duck, Osnaburgs, &c, 15 per 
cent. Cotton cloths paid 25 per cent., with a minimum of 30 cents per 
yard. The general features of this law did not vary materially from those 
of that of 1816, although protection was slightly increased. 

Third. The first tariff thoroughly protective, and so intended to be, was 
that of 1828. It continued until 1832, when was passed the first of two 
laws by which the whole policy of the country was changed. This series 
constitutes stage the 

Fourth. By the act of July 14, 1832, railroad iron was admitted free of 
duty. Axes, spades, &c, as before, 30 per cent. Bar and pig iron were 
carefully protected, but a large portion of the commodities for which they 
were needed were thus admitted without duty, or at the same rate as under 
our present free-trade tariff. Tea and coffee were free. Silks paid 10 per 
cent. Wool was protected, but worsted stuff goods were admitted at 10 per 
cent. Cotton goods paid 25 per cent., with minim urns of 30 cents for plain, 
and 35 for prints. This continued in force until the following March, when 
was passed the Compromise Act, under which linens, stuff goods, silks, and 
other articles were admitted free of duty, and one-tenth of the excess over 
20 per cent, reduced from all other commodities, to take effect December, 
1833, with a further similar reduction every two years until 1841, when 
one-half of the remaining surplus was to be reduced, and the other half in 
1842, when no duty would exceed 20 per cent. 

Fifth. The protective tariff of 1842, which was followed by 

Sixth. The free trade tariff of 1846, now in existence. 

We have thus had six different systems, but the first and second differ 
from each other so little that it is unnecessary to separate the years falling 
under them, whereas the early years of the Compromise differ so essentially 



6 



THE HARMONY OF INTERESTS. 



from the two latter that it is expedient to separate them. I shall therefore 
group the results as follows : — 

First. The tariffs of 1816 and 1824, ending with 1829. 

Second. That of 1828, commencing with October, 1829, and ending 
with the period at which the Compromise began to become operative, Oc- 
tober, 1834. 

Third. The Compromise, commencing with 1835 and ending with 1841. 

Fourth. The years 1842 and 1843, the period immediately preceding 
and following the passage of the act of 1842, being that of the strictly reve- 
nue tariff of 20 per cent. 

Fifth. The tariff of 1842, commencing 1 June, 1843, and ending June, 
1847. 

Sixth. That of 1846, commencing June, 1847, and coming down to the 
present time. 

It will be observed that I have placed the year 1829 in the first period, 
and 1834 in the second. It is not the passage of an act that produces 
change, but its practical operation, and the first year of the existence of a 
new system is but the sequel of that which is passing out. When pro- 
tection is given to the makers of cloth and iron, mills and furnaces are not 
built in a day, nor are they abandoned as soon as protection is withdrawn. 
Had it been possible, I would have pursued the same precise system with 
every period, but it was not. The act of 1842 came into operation on the 
first of September of that year, and in the following one the time for making 
up the Treasury accounts was changed to June 30, and therefore only the 
first ten months that followed its going into effect could be included under 
the previous period. That of 1846 did not come into effect until December 1, 
and therefore but the first seven months that followed could be included in 
the system of 1842. The law of 1842 was in existence four years and a 
quarter, but I could give it only four years, which works materially to its 
disadvantage, and to the advantage of that of 1846. 

In some cases even more than a year would be required to make an exact 
comparison of the working of the different systems. The immigration of 
one year is materially influenced, perhaps I might say determined, by the 
state of the labour-market of the previous year, and the change in that is at 
least a year subsequent to the passage of a law. Thus, if the tariff of 1842 
tended to raise the compensation of the labourer, its effects would not be- 
come obvious until 1843, and it would not be until 1844 or even 1845, that 
an increase of immigration would take place. The price of labour was 
high in 1847-8, and we have a large amount of immigration in 1849. It 
is now falling, and the immigration of next year will probably be reduced. 

So likewise is it with the supply of grain. A diminution in the demand 
for labour in mines and furnaces in 1842 tended to increase emigration to 
the West. For the first year, 1843, those emigrants were consumers only. 
In the second, 1844, they had grain to sell, and prices fell. In the present 
year, the demand for labour in mines and furnaces, and in the erection of 
mills and furnaces, is diminished, and emigration to the West is increased, 
yet the effect of this on the supply and price of food may not, and probably 
will not become obvious until 1852. 

Your predecessor appears entirely to have overlooked this necessity for 
allowing time to permit new systems to develope themselves, and to affect 
the movements of the people. In his last report to Congress is given a 
comparative view of the receipts from customs in the last six months of the 
tariff of 1842, and the first six of that of 1846, by which it is shown that the 
one was twice as productive as the other, and yet very slight reflection 
would have sufficed to satisfy him that scarcely any portion of the difference 



THE HARMONY OF INTERESTS. 



7 



had resulted from the change of commercial policy indicated by the adoption 
of his tariff. The amount that could be imported and paid for was dependent 
on the state of affairs that had existed in the country during the previous year, 
and the passage of the law had scarcely even the slightest influence upon 
it. In the same way, the receipts from customs from September, 1842, to 
November, 1846, are compared with those of 1847 and 1848, when it is 
well known that in 1842, under the Compromise, the imports had fallen so 
low that the government was compelled to send to Europe to endeavour to 
effect a loan for its support even in a time of profound peace. If a cause 
has right on its side, such erroneous views cannot be required to be pre- 
sented. In the tables that I shall now offer for consideration, I have pur- 
sued, as nearly as possible, a uniform course, commencing each period at 
the time at which the system might fairly be deemed to become operative, 
to wit : at the close of the fiscal year following the one in which the law was 
enacted. If error, then, exist at the commencement of the period, it will 
find its compensation at the close, and thus justice will be done to all. 

There still remain two other points in regard to these tables, to which I 
have to ask your attention. 

First. It is usual in almost all tables of import and export to exclude 
specie and bullion. This is wrong, and tends to produce error, and to pre- 
vent a proper understanding of the working of the system that may be under 
consideration. Gold and silver are commodities produced abroad, of which 
we consume large quantities, occasionally exporting the surplus ; and there 
is no reason whatever why they should not be treated precisely as are 
coffee, wines, brandy, and other foreign commodities. When they are im- 
ported they come in exchange for our products, and the sum of merchandise 
and specie imported is the value of our exports. When exported, they go 
in lieu of our products, and should be treated as foreign merchandise re- 
exported. By deducting them from the value of the merchandise imported 
we obtain the value of our domestic exports. 

Second. It is usual to affix to the commodities exported arbitrary prices, 
and thus to obtain their money value. These prices are fixed at the ports 
of shipment, and represent only what ice ask for the commodities we have 
;o sell, not what ice get for them. They represent, too, the prices m'\nus 
ihe earnings of the machinery employed in performing the work of trans- 
portation, which must then be guessed at. The consequence of all this is, 
that the tables published by the Treasury are totally worthless as guides to 
a proper understanding of the general course of trade. What is needed to 
obtain such an understanding is that the nation make out its accounts as it 
would do if it were a merchant, putting down not the price asked but the 
price received, and then balancing its books by ascertaining whether the 
year's business has increased or diminished its debts. The amount received 
for our exports constitutes their precise value, and to ascertain what is that 
amount we should take the value of merchandise imported, deducting there- 
from any debt contracted, or adding thereto any debt paid off*, during the 
year. Thus, if the imports be $100,000,000, and the debt contracted by 
the transfer of stocks has been $10,000,000, the amount paid for by our ex- 
ports is only $90,000,000. On the contrary, if we have paid off that amount of 
debt, it should be added, and we should* thus obtain $110,000,000 as the 
true value of the produce and merchandise exported. The freights are thus 
included. 

To carry this fully into practice in the following tables would be im- 
practicable, but it may be done in part. It is generally understood that the 
amount of American stocks, public and private, held in Europe in 1841 
exceeded $200,000,000, and there is reason to believe that they exceeded 



8 



THE HARMONY OF INTERESTS. 



by $170,000,000 the amount held in November, 1834, when the great stock 
speculation commenced.* By deducting this sum from the merchandise 
imported between the close of 1834 and the year 1841, we shall obtain the 
value of produce and merchandise exported. A part of this debt was ab 
sorbed in the years 1845, 1846, and 1847, while on the other hand new 
debts were created last year, and are now being created by the transmission 
of evidences of debt. To the imports of the three first named should be 
added the debt absorbed, and from those of the last two years should be 
deducted the debt created, and we should then obtain the actual amount 
paid for by produce and domestic merchandise exported, and by the ship- 
ping employed in the work of transportation. 

There are other and earlier years in which corrections might be required, 
but they are of trifling amount by comparison with those to which 1 have 
referred. In those years small loans were made, but it is probable that 
nearly as much was paid off, except perhaps in 1825, in which a con- 
siderable amount of European debt was created. The amount, however, 
is so uncertain that I have not thought it worth while to make any cor- 
rection therefor; although to do so might, and perhaps would, produce a 
sensible diminution in the value received for our produce exported prior to 
1829, which would thereby be placed in a somewhat worse position than 
that in which I have represented it. 

With these remarks, I will now proceed to lay before you the results of 
my inquiries. In doing so, I will give every fact that appears to me likely 
to throw light on this important question, concealing nothing. If, then, 
those who have arrived at conclusions different from mine, and are in pos- 
session of other facts, will put them together as I now do, we may by de- 
grees arrive at the truth. It is the great question for the nation, and it is 
time that it should be examined as a purely scientific, and not as a party or 
sectional one. 



CHAPTER SECOND. 

The average population of the Union in the several periods referred to, 
is thus estimated in the last Treasury Report :t 

First. For the years from that ending Dec. 31, 1821, to that of 

Dec. 31, 1829 11,247,000 

Second. From Sept. 1829, to Sept. 1834$ .... 13,698,000 

Third. From Sept. 1834, to Sept. 1841 . . . . 16,226,000 

Fourth. From Sept. 1841, to June, 1843 .... 18,296,000 

Fifth. From June, 1843, to June, 1847$ . . . 19,771,000 

Sixth. From June, 1847, to June, 1848 .... 21,000,000 

Seventh. From June, 1848, to June, 1849 . . . 21,700,000 



Evidence of -Mr. I. Horsley Palmei, 



* Report of Select Committee on Banks of Issue : 
page 106. 

f Page 68. 

* As these years are frequently referred to separately, I give their population, on The 
lame authority : — 



is-..". •-'::() 

1830- '31 

1831 - '32 

1832- '33 

1833- '34 



12,850,165 
13,377,415 
13,698,665 
14,119,915 
14,541,165 



1843- '44 

1844- '45 

1845- '46 

1846- 47 

1847- '48 



19,034.332 
19,525,749 
20,017,165 
20,508,582 
21,000,000 



THE HARMONY OF INTERESTS. 







The amount of foreign merchandise, specie included,* retained in these 
several periods, has been as fullows : — 

Total. Annual Average. Pr. hoad. 

1821 to 1829 .... $508,000,000 5(3,400,000 $5-00 

1830 55,500.000 4 32 

1831 81,000,000 6 10 

1832 75,500,000 5-51 

1833 88,000,000 6-20 

1834 103,000,000 70S 

1835 to 1841 . . 851.000.000 

Deduct debt incurred 170,000,000 684.000,000 97,700,000 6-02 



1^42 to 1843(21 months,ending June30.) 1 15,000,000 82,000,000 4-48 

1843- '44 90.000,000 5-03 

1844- '45 . . . . . 101,000,000 5-16 

1845- '46 . . . 110.000,000 
Add debt and back in- 
terest paid . 5,000,000 115,000,000 5-75 

1846- '47 . . . 138,000,000 

Do. . . 5,000,000 143,000.000 7 



1847-'48 . . . 181,600,000 

Deduct debt incurred KOOO.000 121,600,000 5-88 



1848-'49 . . . 134,700.000 

Do. 22,000,000 112,700,000 5-19 

The facts derivable from an examination of the above accounts are as 
follows : — 

First. That the amount received from foreign nations in exchange for our 
surplus products largely increased during the existence of the tariff of 1828. 

Second. That the amount so received diminished greatly after the Com- 
promise Bill began to become operative. 

Third. That the amount so received from foreign nations was still fur- 
ther and largely diminished under the strictly revenue clauses of that bill, 
and that the tendency was downward when the system was changed. ♦ 

Fourth. That the amount so received increased rapidly under the tariff 
of 1842, attaining nearly the same point that had been reached under the 
tariff of 1828, and that in both cases the tendency was still upwards when 
the system was changed. 

Fifth. That the amount so received diminished in the year 1848. 

Seventh. That the amount of debt incurred in the last two years must 
tend to produce a further diminution in future ones. 

In establishing the scale of value of our exports, including the earnings 
of shipping, the following is the order to be pursued : — 

First, and lowest. The strictly revenue clauses of the Compromise Act. 

• The movement of specie in those periods was as follows : — 

1821 to 1S2 9, Excess export . $9,000,000 Deducted from the merchandise 

imported. 

1830 to 1834, Excess import . 25.000.000 Added thereto. 
1835 to 1841, " » . 27,000,000 do. 

1842 and 1843, « « . 20,000,000 do. 

1844 to 1847, « « . 18,000,000 do. 

1848, Excess export . . 9,000.000 Deducted. 

1849. <• import . . 2,000.000 Added. 



10 



THE HARMONY OF INTERESTS. 



Second. The partially protective tariffs of 1816 and 1824. 

Third. The Compromise Act. 

Fourth. The tariff of 1828. 

Fifth, and highest. The tariff of 1842. 

Thus far, the tariff of 1846 stands below that of 1842, and the tendency 
is downward, but to what place in the scale it will descend can be deter- 
mined only after it shall have been some years in operation. 

CHAPTER THIRD. 

REVIEW OF THE COMMERCIAL POLICY OF THE LAST THIRTY YEARS. 

I NOW proceed to show in detail the consumption of various commo- 
dities, of foreign and domestic production. In doing so, it will be necessary 
in some cases, to arrive at a correct understanding, to make allowances 
similar to those above given : my object being that of showing what was 
the power to consume that was derived from the power to produce commodi- 
ties to be given in exchange for those which were consumed.* It would be 
proper to do this in all, but the effect would be to render the whole somewhat 
complicated, besides involving much labour. In giving the imports of the 
period from 1834 to 1841, they will always be accompanied with the mark 
of minus one-fifth, so as to show the amount consumed and paid for. In 
giving those of 1845-6 and 1846-7, they will, in some important cases, be 
accompanied with that of plus one-twentieth, so as to show the quantity of 
merchandise imported in a previous period, and then paid for by the cancel- 
ling of certificates of debt. Those of 1848 will have the mark of minus 
one-seventh, to show the amount paid for by the re-export of nine millions 
of foreign merchandise in the form of specie, and the export of eight millions 
of certificates of debt. Of the imports of the year ending in June last, 
amounting to $134,700,000, about $22,000,000, or one-sixth, were obtained 
in exchange for such certificates, and will be so marked. 

The total value of pig, bar and manufactured iron, of every description, 
imported into the Union, since 1821, has been as follows: — 



Years ending, Per head, 

Sept. 30, 1821 to 1829, average .... $5,400,000 48 cents 

" 1830 5,900,000 46 « 

" 1821 , . 7,200,000 54 « 

1832 8,800,000 64 « 

" 1833 7,700,000 55 « 

" 1834 . 8,500,000 59 « 

« 1835 to 1841 . $10,000,000 — }, . 8,000,000 49 « 

« 1842 to June 30, 1843, average . . 5,500,000 30 « 

June 30,1844 5,700,000 30 « 

" 1845 9,000,000 46 « 

1846 . . . $5,830,000-f-^ • 6,120,000 31 « 

41 1847 + s£ • 9,000,000 44 « 

" 1848 . , . 12,500,000 — ^- . 10,800,000 50 «« 

1849 . . . 13,833,094— £ . 11,500,000 53 - 



• See page 9. 



THE HARMONY OF INTERESTS. 



11 



We see here, that the value imported and paid for, largely increased from 
from 1830 to 1834, under the protective tariff of 1828 ; that it diminished 
considerably between 1834 and 1841, and that it reached the lowest point in 
1841-2 and 1842-3. Thenceforward it rose, and the year 1846-7 shows an 
advance of about fifty per cent, from the lowest point. It is therefore ob- 
vious, that the power to pay for foreign iron increased under protection, and 
diminished with its withdrawal. I give now the quantity of various kinds 
of iron imported : 







Old, 


Rolled, 


Hoop, 


Steel, 


Ilam'd, 


Total, 


Prh. 




tons. 


tons. 


tons. 


tons. 


tons. 


tons. 


tons. 


lbs. 


1821 to 1829, average, 


1550 




5400 


1500 


1200 


20,000 


35,050 


7 




1 1 on 




Dili) 


1 OTQ 




*}o p.m 




*j 




6448 




17,245 


2532 


1710 


23,308 


51,243 


81 

5 








20.387* 


2853 


2146 


38,150 


73,687 


19 






998 


28,0-Jb* 


3350 


2131 


36,129 


79,961 


13 


1834, 


, 11,113 


1617 


28,890* 


2214 


2431 


31,784 


78,055 


12 


1835 to 1841, average — 


I 8800 




640 


36,000* 


2600 


2150 


24,000 


74,190 


10 


1 842-3, average, . . 


. 14,500 


500 


46,000f 


2900 


2400 


14,750 


81,050 


10 




26,050 


5770 


46,000 


3600 


2800 


17,500 


101,720 


12 




27,000 


5800 


51.000 


5800 


2S00 


18,176 


110,576 


13 




. 24,000 


2350 


24,000 


5040 


5200 


21,800 


82,390 


9 




27,S00 


1850 


40,000 


6000 


5400 


15,300 


96,350 


104 




| 44,000 


5700 


70,000 


8300 


5850 


17,000 


150,850 


16 


1849, — 


£ 88,000 


8000 


145,000 


10,000 




9,000 


260,000 


27 



The quantity paid for by our exports was thus almost doubled before the 
termination of the second period, in 1834; while it diminished under the 
compromise, and still further under the revenue system. As the tariff of 
1842 came into activity, we find a rapid increase in the power to purchase, 
until the import became checked by the vast increase in the price abroad, and 
in the manufacture at home. 

DOMESTIC PRODUCTION OF IRON. 

Ia 1810, the whole number of furnaces in the Union was 153, yielding 54,000 tons of 
metal, equal to 16 pounds per head of the population. 
1821, the manufacture was in a state of ruin. 

1828, the product had reached 130,000 tons, having little more than doubled in 
eighteen years. 

1S29, it was 142,000. Increase in one year, nearly ten per cent. 

1830, " 165,000. Increase in twq^years, more than twenty-five per cent. 

1831, " 191,000. Increase in three years, about fitry per cent. 

1832, " 200,000, giving an increase in three years of above sixty per cent. 
1840, the quantity given by the census was 286,000, but a committee of the Home 

League, in New York, made it 347,700 tons. Taking the medium of the 
two, it would give about 315,000 tons, being an increase in eight years of fifty 
per cent. 

1842, a large portion of the furnaces were closed, and the product had fallen to 
probably little more than 200,000, but certainly less than 230,000 tons. 

1S46, it was estimated, by the Secretary of the Treasury, at 765,000 tons, having 
trebled in four years. 

1847, it was supposed to have reached the amount of not less than 800,000 tons. 

1&4S, it became stationary. 

1849, many furnaces being already closed, the production of the present year cannot 
be estimated above 650,000 tons ; but, from the accumulation of stock and the 
difficulty of selling it, it is obvious that the diminution next year will be 
greater. 



E.ailroad iron free of duty. j" Duty re-imposed. 



12 



THE HARMONY OF INTERESTS. 





Domestic product 


Per head. 


Import. 


Total constnaptioa 






Per head. 






90,000 


IS 


7 


25 




165,000 


29 


7 


on 
oo 




i q 1 nnn 


33 








910 000 


35 


12 


47 




210,000* 


33 


13 


46 


1834, 


. 210,000* 


33 


12 


45 


1835 to 1841, average, 


. 250,000 


35 


11 


46 


1842-1843, average, 








Q« 
do 




380,000 


45 


12 


57 




ouu,uuu 


oo 




71 




765,000 


86 


9 ' 


95 




, 800,000 


88 


lOf 


98J 


1848, 


800,000 


86 


19 


105 



Deduct from this the quantity imported in exchange for certi- 
ficates of debt, and therefore remaining to be paid for at a 
future time, ......... 3 



There will remain . . . . . . .102 

If now we further deduct from this the accumulation of stock on 
hand, we shall find the consumption not exceeding that of the 

preceding year, say 98| 

1849, 650,000 67 32 99 

The value imported in this period is $13,800,000, and the amount 
of debt incurred is $22,000,000, chiefly for this iron. The 
quantity on hand is variously estimated between 250 and 3C0 
thousand tons. Taking the former, the amount per head would 
be 26 

Which being deducted, would leave the consumption at . — 73 

From 1821 to 1829, the cost of iron, in labour, was high, as is shown in 
the fact that the consumption was but twenty-five pounds per head. In 
1832, it had risen to 47 pounds; but, railroad iron being then freed from 
duty, the consumption of the two following years fell on , indicating an increased 
difficulty of obtaining it. Thence to 1841, the average power of consumption 
appears to have remained almost perfectly stationary ; but, in the two 
following years, we find it receding rapidly. As the tariff of 1842 comes 
into operation, there is a rapid increase in the power of consumption, indi- 
cating a diminution in the amount of labour required for its purchase ; and 
the year 1846-7 shows it attaining a point far higher than ever before known, 
being almost 100 pounds per head, ^ith the year 1847—8, the domestic 
production declined in its ratio to population, and the import increased j but 
the total quantity in market was very little greater than in the previous year, 
yet the close of that year showed an accumulation of stock on hand. In 
1849 we find a rapid increase of import and diminution of production, yet 
the total quantity brought to market is less per head than in 1846— 7, and of 
that there is already so vast an accumulation that the seaports are filled with 
it, and the stock on hand at the furnaces is such, that many will be forced to 
Stop work, as numbers have already done.f It is obvious that the difficulty 



* Railroad iron, free of duty. 

j- Pennsylvania is the great iron-producing State of the Union, and we may form 
some idea of the accumulation of stock, or the diminution of production, there, from .he 
following facts. The pig iron sent to market by the one route of the Chesapeake and 
Delaware Canal, from the opening of navigation to the first of September, 1848, 
amounted to 24 ,000 tons ; whereas, in the same period of 1849, it fell to little over 12,0-UO 
tOriS, and the bar iron from 500U to 1250 tons. 



THE HARMONY OF INTERESTS. 



13 



of obtaining iron is increasing, and that the consumption is rapidly diminish- 
ing, with a tendency to still further diminution. 

The important facts to be derived from this examination are — first, the 
small increase of importation that results, even temporarily, from the abo- 
lition of the duty. During the period from 1830 to 183*2, railroad iron paid 
duty, and yet the importation trebled in that time, and the last year was far 
the greatest of the three. For nine years after, it was totally free from duty ; 
and, although much of that which was imported for railroads is said to have 
been used for other purposes, the increase averages but seventy per cent. By 
the tarirT of 1841,* railroad iron was rendered subject to duty, and the import 
of rolled iron in 1842 and 1843 was 46,000 tons, being two-thirds more 
than was imported free of duty in 1834. 

Second. That, under the protective tariff of 1828, the total consumption, 
per head, increased, in four years, fifty per cent. That, under the system 
which prevailed from 1832 to 1842-3, consumption was almost stationary, 
and was probably less per head than it had been at the commencement of 
the period. That, under the tariff of 1842, the average consumption in- 
creased in the first year from thirty-nine to fifty-seven pounds, and that, in 
1846 and 1847, it attained the height of almost one hundred pounds per 
head, exceeding by 150 per cent, the consumption of the free trade period of 
1842-3. 

If, now, we look at the single article of railroad iron, we find similar 
results. Up to 1842, not a single ton of it had ever been made in this 
country, and yet the average consumption of rolled iron, of every description, 
in the ten years from 1832 to 1842, free of duty as it was, was but about 
36,000 tons. Commenced only in 1843, the manufacture of railroad bars 
in 1845 had already reached about 50,000 tons, and, in 1847, it had 
attained nearly 100,000 tons, and yet the average import of rolled iron for 
the four years was nearly as great as before. The domestic production has 
now fallen almost to nothing, and yet the import has been only 174,000, of 
which, it is said, there is now on hand a supply adequate to meet the demand, 
such as it is at present, for two years to come. 

The questions to be settled are — Which is the system under which iron is 
most cheaply furnished ? Which is the one under which it is most readily 
obtained by those who desire to use it ? If free-trade be the one, then the 
power to import, under it, ought to grow more rapidly than the power to 
produce diminishes ; but we see here that the power to import diminishes 
with the power to produce, and grows with the growth of the power of pro- 
duction, being greatest under protection. 

COAL. 





Anthracite. 


Foreign. 


Total. 


Consumption per 




Tons. 


Tons. 


Tons. 


1000 of populat'n. 


1821 to 1829, average, 


37,000 


30,000 


67,000 


6 tons. 




142,000 


54,000 


196,000 


15 


1831, 


216,000 


34,000 


250,000 


19 


1832, 


318,000 


66,000 


384,000 


28 


1833, 


395,000 


85,000 


480,000 


34 


1834, 


451,000 


67,000 


518,000 


35 


3835 to 1836, . . . 


671,000 


78,000 


749,000 


50 


1837 


881,000 


140,000 


1,021.000 


64 


1838 to 1841, . . . 


850,000 


145,000 


995,000 


58 


1842 


1,108,000 


141,000 


1,249,000 


69 



* This was a provisional tariff, having for its sole object the increase of revenue, and 
was limited to alterations in a. few articles. 



14 THE HARMONY OF INTERESTS. 



Anthracite. Foreign. Total. Consumption per 

Tons. Tons. Tons. 1000 of populat'n. 

1843, 1,312,000 55,000 1,367,000 74 

1844, 1,631,000 87,000 1,718,000 90 

1845, 2,023,000 86,000 2,109,000 108 

1846, 2,343,000 156,000 2,499,000 125 

1847, 2,982,000 148,000 3,130,000 152 

1848, 3,089,000 196,000 3,285,000 156 

1849, 3,200,000 200,000 3,400,000 156 



In this case, it has been necessary to separate the years 1842 and 1843, 
because of the whole of the latter coming within the action of the tariff of 1842,* 
the account of the domestic production being made up to the close, instead 
of the middle of the year, as in the case of imports. 

The facts that here present themselves are worthy of careful consideration. 

When we produced little coal, we imported little, the total consumption 
being only six tons per thousand of the population. As the production 
grew, the import grew, and thus, in 1846 and 1847, when we produced 
eighty times as much as in the period from 1821 to 1829, we imported five 
times more. 

From 1829 to 1834, and thence to 1837, the increase of consumption was 
rapid. Thence to 1841, it diminished ten per cent. In 1842, it was 
scarcely higher than it had been five years before. In the five years which 
followed, it rose from 69 to 152 tons, showing a rapid diminution in the 
quantity of labour required to be given in exchange for it. In 1848, under 
the action of the tariff of 1846, the production became almost stationary, 
and the diminished power of consumption is shown in the fact that although 
the quantity sent to market maintains the same ratio to population, much of 
it is sold at a loss to the producer. 

With every step in the growth of the home production of coal, the money 
price has steadily diminished. That of a ton of anthracite in 1826, in 
Philadelphia, was six, eight, and sometimes ten dollars, and yet the whole 
import was only 970,000 bushels, or about 30,000 tons. In 1846, the price of 
anthracite was about four dollars, and yet the import was 156,000 tons. It 
would appear from this, that when a nation is capable of supplying itself, 
other nations, desiring to sell, must come to them and sell at the lowest 
price, and the consumption is large; but when it cannot supply itself, it 
must go abroad to seek supplies, and pay the highest price, and then con- 
sumption is small. Applying this to iron, we find that when we had to seek 
abroad for nearly all our supply, it sold at prices twice or thrice as great as 
those at which it is now obtained. 

In 1846 and 1847, notwithstanding the vast increase in the supply of 
coal, so great was the consumption that we had to go abroad to make up the 
deficiency, and to pay the high prices which our own demand largely tended 
to produce, a state of things which could not have happened had we been 
prepared to supply the whole demand. 

It remains to be seen whether the converse of this proposition may not be 
true, to wit, that when a nation makes a market at home for nearly all its 
products, other nations have to come and seek what they require, and pay 
the highest price; and that, when it does not make a market at home, 
markets must be sought abroad, and then sales must be made at the lowest 
prices. If both of these be true, it would follow that the way to sell at 
the highest prices and buy at the lowest is to buy and sell at home. 

* It came into action on the 30th of August of that year. 



THE HARMONY OF INTERESTS. 



COTTON. 

IMrORT OP COTTON MANUFACTURE. 

Years ending 

September 30, 1821 to 1829, average, $9,454,000 

1830, 7,862,000 

m 1831, 16,090,000 

1832, 10,399,000 

1833, 7,660,000 

1834, 10,145,090 



Per head. 
84 Ct8. 

61 



1 21 

76 
5 
7 



if 



6 av. 



«< 1835 to 1841, 12,000 — f... 9,600,000 59 

1842 to June 30, 1843, average, 7,184,000 39 

June 30, 1844, i 13,641,000 72 

1845, 13,863,000 71 

1846, 13.500,000 67£ 

1847, 16,071,000 78" 

1848, §18,412,000 — i,... 15,582,000 74 

1849 15,180,900 — 12,650,000 56 

The number of yards of cloth imported in 10 years is thus given. I have 
been unable to complete this table, or it should be given in full. I give all 
I have met with : 

1831, 68,577,000 

1835, 53,974,000 

1836 56,931,000 

1837, 23,774,000 

1838 20,240,000 

1839, 42,418,000 

1840, 20,011,000 

1842-3, 8,936,000 

1844- 5, 34,500,000 

1845- 6, 36,800,000 

The differences here appear much more striking than in the table above. 
The diminution of consumption under the free-trade system is very regular, 
and the increase under protection nearly as much so. 

Owing to the variety of cotton goods imported, it is difficult to estimate 
the weight of cotton contained in them ; but, in the following table, I have 
made a rude estimate, with a view to show the growth of domestic con- 
sumption. It must be borne in mind that a large portion of the foreign 
commodities are of the finer and more costly descriptions, and that the 
weight is therefore small when compared with the value. 



Taken by 
Northern 



Taken by Per head, 

Southern domes- Per head. Total, 



Crop of manufacturers, manufactur's. 

1825-6 to 1829-30, average, bales 110,000 

1830- 31, 182,000 

1831- 32, 173,000 

1832- 33, 194,000 

1833- 34, 196,000 

1834- 35, 216,000 

1835- 36, to 1841-42, average, ... 263,000 

1S42-43, 325,000 

1843- 44, 347,000 

1844- 45, 389,000 

1845- 46, 423,000 

1846- 47, 428,000 

1847- 48, 531,000 

1848- 49 518,000 



30,000 
40,000 

75,000 
100,000 



tie. 
4 11 

H 

5£ 

6* 
5f 

6) 

7 

H 

8 

H 
»i 

12 

n-A 



foreign, p. head, 
ljlbs. 5£ 



10 



1 

2 

n 

Of 

H 
l 



n 
n 
n 



6£ 

n 

6| 

H 

7 

n 

n 

io| 

lOf 

13£ 
12* 



16 



THE HARMONY OF INTERESTS. 



In estimating the domestic consumption, I have throughout taken the 
bale at four hundred pounds, although aware that there has been a gradual 
increase of the weight. This change would be important to be considered, 
if it were my object to compare 1847 with the distant year 1831 ; but it is 
unimportant when the object in view is the comparison of years which are 
near together, as is the fact. 

The results in this case correspond almost precisely with those obtained 
from the examination of iron and coal. The home consumption of the crop 
of 1834-5, per head, was almost fifty per cent, greater than the average of 
previous years, while the import remained almost undisturbed. Under the 
Compromise, consumption appears to have remained almost perfectly sta- 
tionary, the increase of domestic production being compensated by diminished 
importation. In 1842-3, the consumption per head was scarcely greater 
than it had been eight years before, when it should have doubled. With 
the operation of the tariff of 1842, we find the consumption of domestic 
products 75 per cent, greater, while the import is also almost doubled. 
It would appear obvious, that the power to obtain clothing in return for 
labour increased in both protective periods, and diminished with the approach 
to free trade. With 1848-9, the demand for Northern manufactures dimi- 
nished; and, as many mills are now closed that were at work but a few 
months since,* there is reason to believe that the power to obtain clothing 
in return for labour is in a course of gradual diminution. 

A portion of the cotton worked up at home has been exported, and was 
therefore not consumed at home. To have made allowance for this would 
have made the table very complicated, and it did not appear to be necessary, 
as the proportions were well preserved, having been about a million or 
dollars when the home consumption was 100,000 bales, two millions when 
it rose to 200,000, three millions out of 300,000, and five millions out of 
500,000 bales. 

WOOL. 
IMPORT OF WOOLLENS. 



Years ending 
September 30, 1821 to 1829, average, . 


$8,900,000 


Per head. 
79 cents 


«« 

a 
<( 
«« 
<( 


1830, . 

1831, . 
1832, 
1833, 
1834, 




5,766,000 
12,627,000 

9,992,000 
13,262,000 
11,879,000 


45 
95 
75 
93 
82 


<( 


1835 to 1841, av. 


,$13,950,000 —\ 


11,160,000 


69 


<« 


1842 to June 30, 


1843, 


6,300,000 


34 


June 30, 
«< 
<< 
«« 


1844, 

1845, , 

1846, , 

1847, . 




9,475,000 
10,666,000 
10,089,000 
10,570,000 


50 
55 
50 
51 


It 
<< 


1848, . 

1849, . 


$15,230,000 — A 
13,704,000 — £ 


13,000,000 
11,400,000 


62 
53 



* Within the last six months there have been been many failures among those engaged 
in the business; and, in these cases, the mills are not only closed, but likely so to remain. 

The import into Cincinnati may be taken as evidence of the course of affairs in ttje 
West, and here we have the same result: 

1846- 7, 12,528 bales. 

1847- 8, 13 )476 

1848- 9, 9j 058 

We see, thus, that notwithstanding the extreme lowness of price, the consumption haa 
diminished. 



THE HARMONY OF INTERESTS. 



17 



Prioi to the passage of the tariff of 1824, the woollen manufacture was 
in a very depressed condition; and, in 1825, the number of sheep was only 
fourteen millions,* producing about thirty-five millions of pounds of wool. 
Thenceforward the number increased, and the crop of 1829, 1830 and 
1831, was estimated at fifty millions of pounds, the produce of twenty mil- 
lions of sheep. At the close of 1834, there had been a further increase,* 
but to what extent we are not informed ; but the value of the woollen 
manufacture was estimated at 65 millions of dollars against 40 millions in 
1831. In 1840, the census returns show but 19,311,000, the number 
having diminished while the population had largely increased. The depres- 
sion of 1841-2 was accompanied by the sacrifice of sheep to a considerable 
extent; yet so rapid was the subsequent change, that the number, in 1845, 
was estimated at twenty-five millions,"}" and in 1848 at twenty-eight millions. 
Ohio had, in 1846, only 2,065,000 ; but, in 1848, the number had risen to 
3,677,000. The number in New York, in 1845, was 6,443,000, and, sub- 
sequently to that date, it had largely increased. 

The deliveries on the New York canals, and at Pittsburgh, in 1840, were 
one-fifth of the total production by the census; and, since that date, they 
are thus stated — J 

1841, . . . 5,094,035 1845, . . . 13,267,609 

1842, . . . 4,823,881 1846, . . . 12,269,537 

1843, . . . 5,713,289 1847, . . . 16,325,987 

1844, . . . 6,798,769 1848, . . . 11,665,540 

Even this does not mark the whole increase, as the woollens factories of 
the interior of New York and other States absorb much that would otherwise 
pass on the canals, destined for distant places. 

With these very imperfect data, we may now form some estimate of the 
consumption of this most important commodity. In estimating the weight 
contained in the cloth imported, I have taken it as being worth one dollar 
per pound, and therefore the figures which represent the valine per head, 
give also the weight per head. 



Average of 
1821 to 1829, . 


Millions 
of sheep. 
. 15 


Pounds of 
wool. 

37,500,000 


Imports. 
Pounds. 
2,000,000 


Total, domestic 
manufacture. 
39,500,000 


Per head. 

Total, 
dom. 4 for. 

3.50 4-29 


1830, . 

1831, . 
1832, 
1833, . 
1834, 


20 
. 21 

22 
. 23 

24 


50,000,000 
52,500,000 
55,000,000 
57.500,000 
60,000,000 


669,000 
5,622,000 
4,042,000 

950,000 
2,341,000 


50,669,000 
58,122,000 
59,062.000 
58,450.000 
62,341,000 


3- 90 

4- 40 
4-40 
4-15 
4-30 


4- 35 

5- 35 
5-15 
5-08 
5-12 


1835 to 1841, . 


. 22 


55,^00,000 


10,000,000 


65,000,000 


4- 


4-69 


1842 and 1843, 


19 


48,000,000 


7,500,000 


55,500,000 


3- 


3-34 


1844, 

1845, . 

1846, . 

1847, . 


22 
. 24 

26 
. 27 


55,000,000 
60,000,000 
65,000,000 
67,500,000 


23,800,000 
28,800,000 
16,500,000 
8,460,000 


78,800,000 
88,800,000 
81,500,000 
75,960,000 


4-10 
4-50 
4-10 
3-70 


4- 60 

5- 05 
4-60 
4-20 


1848, . 
1849, 


28 


70,000,000 


11,380,000 
17,860,000 


81,380,000 


3-90 


4-52 



By the tariff of 1846, the duty on many descriptions of foreign wool was 
raised, while that on cloths was lowered; which accounts for the great dimi- 
nution in the quantity imported. 

That this is very incorrect there is no doubt ; but it will enable us to 
make some comparison between the increase of imports as compared with 
the diminution of home production. From 1830 to 1834, the production 



* Pitkin's Statistics, p. 488. f Patent Office Report, 1847, p. 213. 

* Merchant's Magazine, Vol. XXI., p. 217. 

3 



18 



THE HARMONY OF INTERESTS. 



grew, and the import was large. From 1835 to 1841, the former largely 
diminished in its ratio to population; and the foreign cloths paid for in that 
period fell to sixty-nine cents per head. In the revenue period, from June, 
1841, to June, 1843, production was very small, and the import fell to about 
thirty-four cents per head. In the four succeeding years, both grew rapidly. 
Under the tariff of 1846, there is a slight increase of import; but the home 
manufacture has diminished. The power to obtain cloth in exchange for 
labour has, therefore, invariably grown in the protective periods, and dimi- 
nished with every approach to free trade. 



PRODUCTION OP LEAD. 



The arrivals at New Orleans have been as follows : — 



1828- 
1830, 
1831, 
1832, 
1833, 



29,* average, 



Pigs. 
164,000 
254,000 
151,000 
122,000 
180,000 



1834, . 
1835 to 1841, 
1842, . 
1843, 
1844, . 



Pigs. 
202,000 
298,000 
473,000 
571,000 
639,000 



1845, 
1846, 
1847, 
1848, 
1849, 



Pigs. 
732,000 
785,000 
659,000 
606,000 
508,000 



We see here that the average of the seven years, from 1835 to 1841, was 
little greater than the product of 1830. The temporary tariff of September, 
1841, raised the duty to five cents per pound, and production rose to 
almost 800,000 pigs. Since the passage of that of 1846, it has fallen to 
500,000, and for this diminished supply there is little demand. 

We have thus far seen that the application of labour and capital to the 
opening of mines, the erection of furnaces, mills, and factories, and to the 
conducting of such works, was arrested at the close of 1834, and that it 
did not recommence until after the passage of the tariff of 1842. We have 
also seen that it increased rapidly from 1843 to 1847, that it became sta- 
tionary in 1848, and is now retrograding. Both seek to be employed, and 
if denied employment at home they must seek it abroad. If employed at 
home, there is a tendency to concentration and combination of action. If 
sent abroad, there is a tendency to dispersion, with diminished power of com- 
bination. One of these courses tends to increase the reward of labour, the 
other to diminish it. With a view to ascertain the effects of the two systems, 
I give, 

First, The amount of immigration, as showing how far the wages of 
labour tended to invite the people of foreign nations to come and reside 
amongst us, and, 

Second, The amount of shipping built, to show how far the establishment 
of an import trade of men, the cargo that pays the highest freights, tended to 
increase the facilities provided for the export of merchandise : — 



imigration. 



1821 to 1829, 


12,000 


1842-3, . 


88,133 


1830, 


. 27,153 


1844, . 


. 74,607 


1831, . 


23,074 


1845, 


102,415 


1832, 


. 45,287 


1846, . 


. 147,051 


1833, . 


56,547 


1847, 


234,742 


1834, 


. 65,335 


1848, . 


. 229,492 


1835 to 1841, 


67,520 


1849, 


299,610 



• These are the earliest years for which I have met with any accounts. 



THE HARMONY OF .INTERESTS 



19 



821 to 1829, average 
1830, 
1831, 
1832, 
1833, 
1834, 

1835 to 1841, . 
1842-3, . 
1844, (nine months,) 
1845, 
1846, 
1847, 

1848, 
1849, 



Total shipping built, 
tons. 

, 90,000 
58,000 
85,000 
144,000 
161,000 
118,000 
108,000 
91,000 
103,000=13; 
146,000 
188,000 
243,000 
316,000 
256,000 



Per thousand, 
of population. 



Steamers built. 



Per million of 
population. 



000 



8 1823-29 


35 


3-1 


4-5 


37 


3 


6-4 


34 




1 O-^ 


i no 


7-2 


11 J 
111 


Do . 


4*6 


8-1 


aa 

vO . 


4.7 


6-6 


no 


K .7 


5 


108 


5-8 


7-2 


163=217 


11-4 


7-6 


163 


8-5 


9-4 


225 


11-5 


11-8 


198 


9-7 


15 


175 


8-3 


11-8 


208 


9-6 



We see here a large increase in the years from 1830 to 1834, followed by 
a gradual diminution until we reach 1843, after which the rise is very rapid. 

On a former occasion, I stated that immigration was not affected by 
changes of policy until after the lapse of more time than was required for 
other of the subjects we have had under consideration. A change tends to 
raise or depress the value of labour — to raise or depress the price of men — 
and after a rise has been effected, men come to offer their labour for sale. 
It will be seen that the number in 1831 was less than in 1830, and that 
it was not until 1832 that it rose. With the exception of 1835, it con- 
tinued to rise until 1836-7, when it reached 78,083, after which it fell. In 
1843—4, it felt the effect of the disastrous year 1842, and the number was 
only 74,000; and it was not until 1844-5 that it began to grow rapidly. 
At the present moment it is large, because, of the great demand for labour in 
the years that have passed, but it is now feeling the effect of the present 
diminished demand, and consequent fall of wages. 

Such, likewise, is the case with shipping. The first effect of a rise of 
wages is to increase the power to obtain the necessaries of life, and it is not 
until after that shall have been done that the power to consume foreign com- 
modities tends materially to increase. The increase of ship-building did not 
commence until 1832. It fell off in 1838. Thus far the movement is pre- 
cisely the same as that of immigration. It recommenced in 1844, somewhat 
in advance of immigration. It is now maintained by that, and that alone, 
and when that is falling off, it must fall too. The close connection between 
the power to secure valuable return-freights and the power to build ships, is 
shown in the following table, in which the movements of both are shown : — 



1821-31, 
1832, 
1833, . 
1834, 
1835, . 
1836, 
1837, . 



Immigration, 
aver., 14,000 . 
45,000 
. 56,000 . 

65,000 
. 53,000 . 

62,000 
. 78,000 . 



Shipping built. 

. 87,000* 

144,000 
. 161,000 

118,000 
. 60,000 

113,000 
. 122,000 

120 000 



1843, 
1844, 
1845, 
1846, 
1847, 
1848, 
1849, 



Immigration. 
, 75,000 

74,000 
, 102,000 
147,000 
, 239,742 
229,492 
299,610 



Shipping built. 
. 64,000 

140,000 
. 146.000 

188,000 
. 246,000 

316,000 
. 256,000 



1838-42, aver., 76,000 

The amount of shipping at present employed is, probably, less than it was 
two years since. A vast quantity now lies idle in the ports of California, and 
it is to replace it that ships are now being built. f How far the immigration 

* Average of last two years only 71,000. 

j" The reason for now building ships may be found in the fact stated in the following 
paragraph, which I take from one of the papers of the day : — 

"It is a remarkable fact, that of all the ships arrived in the bay of San Francisco from 



20 



THE HARMONY OF INTERESTS. 



of the ensuing year is likely to afford inducements for increasing our tonnage 
may be judged from the following comparative view of the arrivals at New 
York in the last four months of the two past years, as compared with the 
present one, furnished by the Commissioners of Immigration : — 

September, October, November, and December, 1847. 1848. 1849. 

44,137 61,310 48,715 

Instead of an increase of about forty per cent., there is a diminution of 
above twenty per cent.; and that this decrease must go on, will be obvious 
from the facts contained in the following paragraph, which I take from the 
New York Herald: — 

"Emigration to Europe. — The fine and well-tried packet-ship, Ashburton, sailed 
yesterday for Liverpool, having on board 104 passengers, who having taken a 
glimpse at 'the land of liberty,' and not finding it the El Dorado they expected, 
came to the conclusion of returning homeward. They were principally natives of 
Ireland. The Jamestown and Constellation sail to-morrow with similar cargoes." 

Every man who thus returns prevents the emigration of a hundred that 
would otherwise have crossed the Atlantic. 

I propose now to show the tendency to depopulation, as marked by the 
sale of public lands, compared with immigration : — 

Land sold. Per head of Land sold. Per head of 

Acres. ' Immigration. Acres. Immigration. 

1843, . . 1,605,000 . . 21 

1844, . 1,754,000 . 23 

1845, . . 1,843,000 . . 18 

1846, . 2,263,000 . 15 

1847, . . 2,521,000 . . 11 

1848, . 2,747,000 . 13J 

1849, n;.jt obtained. . . % 



1821-29, average, 825,000 . . 69 

1830, . . 1,244,000 . 46 

1831, . . . 1,929,000 . 83 

1832, . . 2,777,000 . 61 

1833, . . . 2,462,000 . . 44 

1834, . . 4,658,000 . 70 
1835-41, average, 7,150,000 . 105f 
1842, . . 1,129,000 . 11 

At no period of our history has the process of depopulation proceeded 
with the vigour that is now manifested. Emigrants from Europe are now 
returning home, disappointed ; while the emigration to the West is almost 
marvellous. The quantity of land sold does not, as I understand, give any 
clue to the quantity occupied, because of the facilities afforded by the law to 
squatters. 

It is estimated, we are told, that from thirty thousand to fifty thousand 
have been added to the population of Iowa within six weeks, and that, by the 
close of navigation, the population will have increased one-fourth since the 
1st of September. Such is the course of things in regard to all the new 
States, west and south-west; and, if to this be added the emigration to Cali- 
fornia, it may be doubted if the population of the old States will be as large 
at the close of the year as it was at the commencement. 

the Atlantic ports, some of which have been anchored there for near four months, not one 
is advertised for a return trip home. This, of course, is easily accounted for. There is 
no freight to come back, but passengers and gold dust, and as these mostly prefer the 
steamers, the ships have nothing to do but to wait and see what circumstances may do 
for them. Meanwhile, the absence of so many vessels, and the improbability of an early 
return, are having a strengthening influence upon home freights. Rates ere long must 
rapidly advance; and were it spring time now, instead of fall, I think it would be diffi- 
cult to negotiate engagements at present prices." 

A vast amount of capital nas been locked up in ships that are idle, and others must 
now be built to take their place. If they were back again, ship-building would now be 
entirely suspended. 

f To this must be added the occupation of Texas and Oregon. 

t To these must be added the occupation of California. 



THE HARMONY OF INTERESTS. 



21 



PRODUCTION OF FOOD. 



The power to supply food to those who come to live amongst us, and also 
to send it abroad in exchange for other commodities, may be taken as some 
evidence of the productiveness of labour applied to its cultivation, and I 
therefore give the following statement of the export and import of wheat and 
flour, in bushels of the former : — 



Exports. 
1821-29, average, 4,400,000 



Imports. 



1830, 

1831, 
1832, 
1833, 
1834, 

1835, 
1836, 
1837, 
1838, 
1839, 
1840, 
1841, 
1842, 
1843, 
1844, 
1845, 
1846, 
1847, 
1848, 
1849, 



6,100,000 
9,441,000 
4,407,000 
4,811,000 
4,113,000 
8,914,000 
2,529,000 
1,610,000 
2,247,000 
4,712,000 
11,198,000 
8,447,000 
7,237,000 
4,519,000 
7,751,000 
6,365,000 
13,061,000 
26,312,000 
12,631,000 
9,500,000 



311,000] 
650,000 I 
,000,000 [ 
927,000 J 



20,000 
369,000 



Population 
by immigration. Depopulation. 

12,000 69 


27,000 
23,000 
45,000 
56,000 
65,000 


46 
83 
61 
44 
70 


63,000 


105 

Texas and Oregon. 


72,000 




88,000 


11 

21 


74,000 
102,000 
147,000 
234,742 
229,000 
299,610 


23 
18 
15 

Mexico and 
13 j California. 



It is here shown that, notwithstanding the rapid growth of manufactures 
in the period from 1830 to 1834, the export of food was not only maintained 
but it increased. The tendency to depopulation had diminished, and the power 
to obtain iron to assist in the work of cultivation had increased. Thereafter, with 
the increasing tendency to depopulation, as immigration and manufac- 
tures and the power to obtain iron became stationary, the production 
of food so far diminished that the price rose to such a point as to render it 
profitable to import it; and it may be doubted if, notwithstanding the in- 
crease of numbers, the whole quantity produced between 1835 and 1840 
was greater than in the five previous years. From 1843, we find it gra- 
dually increasing, notwithstanding the vast amount of labour employed 
in producing coal, iron, cotton and woollen goods, ships, steamboats, &c. 
How great was the increase may be seen by the following comparison of the 
returns under the census of 1840, and the Patent Office estimates for 
1847:— 



1840, 
1847, 



Wheat. 

84.S23,000 
11^245,000 



Increase, 29,422,000 



Barley. 

4,161,000 
5,649,000 



Oats. 
123,071,000 
167,867,000 



1,488,000 44,797,000 10,577,000 



Rye. 

18,645,000 
29,222,000 



Buckwh't. 

7,291,000 
11,673,000 



Ind. Corn. 

377,531.000 
539,350,000 



4,382,000 161,819,000 252,304,000 



Totals. 

615.522,000 
867.826,000 



We have here an increase of no less than 40 per cent, in seven years, 
during which the increase of population was but 23 per cent. Equally 
divided among the whole people, there would be 36 bushels per head in the 
one case, and 42 in the other; and thus we see that the increase in the faci- 
lity of obtaining the machinery of cultivation is attended by increase in the 
product of cultivation; while increase in the power to produce cotton and 
woollen cloth enables the farmer to obtain for each bushel produced a larger 
amount of clothing than before. 



THE HARMONY OF INTERESTS. 



The net export is as follows, per head of the population : — 



1821 to 1829, . 


. -39 


1834, 

1835 to 1841, 


. -29 


1845, 


. -38 


1830, . 


•47 


•25 


1846, . 


•65 


1831, 


. -71 


1842-3, . 


. -31 


1847, 


. 1-28 


1832, . 


•32 


1844, . 


•41 


1848, . 


•60 


1833, 


. -35 






1849, 


•45 



We see, thus, that with the exception of the year of the famine in Ire- 
land, it has never reached a bushel per head, and that it has invariably 
been largest in the periods of protection — those periods in which the largest 
and most valuable home freights could be obtained. With the approach to 
free trade the power to maintain trade has diminished ; and as we have re- 
ceded from it and have approached protection, it has increased with the 
growth of immigration. 

The effect of this is seen in the constantly increasing quantity of Canadian 
produce that passes through New York on the way to England. It is stated 
that while in 1848 only 50,000 barrels of Canadian flour passed through 
New York, the quantity in 1849 that came through by the single route of 
Oswego was 200,000 barrels, and that there were, in addition, 623,000 
bushels of wheat. This, being of foreign production, has, of course, to be 
deducted from the amount of exports ; but if the import of men should 
diminish, freights outward must rise, and the tendency to send flour or 
wheat to market through the ports of the Union will pass away. 

What was, prior to the census of 1840, the production of grain, it is not 
now possible to ascertain ; but we know that, in the period from 1830 to 
1834, prices were moderate and consumption was large. It is not probable 
that it was as much per head as was given by the census for 1840, because 
the increased facilities of transportation in the latter period enabled the 
farmer to give more of his labour to cultivation. If it be taken at thirty 
bushels per head, it will probably not vary greatly from the truth. In the 
following period, production was so small that prices rose to a point that 
permitted importation from Europe ; and the advance so far exceeded that of 
wages as to cause almost universal disturbance between employers and work- 
men. It may be doubted if it then exceeded twenty-five bushels per head. 
By degrees, the tendency to depopulation diminished ; and, in 1840, we find 
it thirty-six bushels, to rise to forty-two in 1847. The same causes that 
diminished production in 1836 are now again at work. Immense num- 
bers of people are in motion changing their places of labour; and those 
that have gone to California, New Mexico, the Salt Lake, &c, can scarcely 
be taken at less than a hundred thousand. These men are not now 
producers; and thus, while we have this year added to our population 
280,000 persons from abroad requiring to be fed, we have exported great 
numbers who have not only ceased to be producers, but have taken with 
them vast quantities of food. It may fairly be doubted if the product of 
this year, per head, exceeds thirty-eight to forty bushels; and hence it is, in 
part, that the prices are even thus far maintained. Nevertheless, there is a 
gradual tendency to a fall of prices, showing a power of consumption dimin - 
ishing in a greater ratio than that of production. 

That the power to obtain food in return to labour diminished greatly 
between 1835 and 1839 must be within the recollection of all who were 
familiar with the events of that period. Never has there been experienced 
in this country so much anxiety relative to the result of the harvest as was felt 
in 1838. From that time, the tendency to dispersion diminished; and, in 
1839 and 1840, labour commanded good supplies of food, as is obvious from 
the fact that immigration rose, attaining, in 1841-2, the height of 101,000. 
The value of labour and food had, however, by that time greatly fallen, and, 



THE HARMONY OF INTERESTS. 



23 



in 1842, it fell to a lower point than had been known for twenty years, the 
consequence of which was, a great diminution in the immigration of the two 
succeeding years. Thence to 1847, the increase was very rapid ; but. in the 
following year, it became stationary, and is now falling rapidly. 
We may now proceed to the next great article of food — 



SUGAR. 

Crop of 

Foreign. Louisiana. Total. Per head 

1821 to 1829 .... 57,000,000 45,000,000 102,000,000 9 

1830 96,000,000 48,000,000 144,000,000 11 

1831 ' . 69,000,000 75,000,000 144,000,000 10$ 

1832 48,000,000 75,000,000 123,000,000 9 

1833 97,000,000 70,000,000 167,000,000 12 

1834 115,000,000 75,000,000 190,000,000 13 

1835 to 1841,138,000,000 — J . 110,000,000 77,000,000 187,000,000 11$ 
1842 and 1843 . . . .114,000,000 115,000,000 229,000,000 12$ 

1844 . .... 182,000,000 105,000,000 287,000,000 15 

1845 114,000,000 200,000,000 314,000,000 16 

1846 108,000,000 186,000,000 294,000,000 14$ 

1847 232,000,000 146,000,000 372,000,000 18 

1848 244,000,000 240,000,000 484,000,000 23 

1849 . . . 242,000,000 220,000,000 467,000,000 21$ 



We see here a rapid increase of consumption from 18*29 to 1834, and that 
it then diminished in actual amount until 1844, and that the average of 
1846-7 and 1847-8 was but little less than double that of 1842-3. The power 
to consume foreign sugar has kept steady pace with the increase in the home 
supply, giving a total consumption for the year 1847-8 exceeding, by more 
than 150 per cent., that of the period from 1821 to 1829, and almost double 
that of 1842 and 1843. 

The power of producing food thus kept pace with the power to apply 
labour and capital to the conversion of food and other raw materials into 
iron, cloth, and other commodities requisite for the use of man; and 
thus both kept pace with the tendency to the concentration of population. 
With every increase in the power of production, consumption grew, and the 
labourer received larger returns for his labour, producing a tendency to 
immigration. With every diminution in the power of production, the power 
to pay for foreign commodities diminished, and hence it was that the early 
years of the approach to freedom of trade were signalized by the creation of 
a vast debt, the interest on which has now to be paid. 

INTERNAL COMMERCE. 

We may now examine how far the power to maintain internal trade waxed 
or waned with the increased or diminished power of production, for which 
purpose, I give the tolls on the three principal routes between the east and 
west, and the tonnage that passed through the Louisville and Portland Canal. 
In examining them it will be proper to bear in mind that the receipts from 
immigrants from Europe, in the last two years, have been prodigious, not- 
withstanding which there has been a large decrease in the two from which I 
have been able to obtain complete returns. It follows, of course, that the 
receipts from merchandise have greatly diminished in their ratio to popula- 
tion. Should immigration continue to fall off, the deficiency in the receipts 
from these works will become of serious importance to the treasuries of both 
New York and Pennsylvania. 



24 



THE HARMONY OF INTERESTS. 



TOLLS. 



Baltimore Ton'ge, 



3826, 
1827, 
1828, 
1829, 


New Yoik 

Canal. 
§844,000 
880,000 

oon AAA 

82U,000 
815,000 


Per 1000 of 
population. 

$73 
74 

n o 
DO 

65 


and Ohio 
Railroad. 


Per 1000 of 
population. 


Penn. 
Canals. 


P. 1000 of 
population. 


L. & P. 
Canal 


1830, 
1831, 
1832,' 
1833, 
1834, 


"1 A 4 O AAA 

1,042,000 
748,000 
1,112,000 
1,388,000 
1,381,000 


81 

56 
81 
98 
95 


§31,000 
137,000 
196,000 
205,000 


9-9 

13- 9 

14- 1 


148,000 
306,000 


10-5 
21-1 


76,000 

70,000 
170,000 
162,000 


1835, 
1836-41 


1,482,000 
1,655,000 


99 
102 


263,000 
349,000 


17-6 
21-5 


679,000 
1,020,000 


45-4 
60-7 


200,000 
223,000 


1842, 


1,749,000 


97 


426,000 


23-6 


903,000 


50-0 


172,000 


1843, 


2,081,000 


112 


575,000 


31-0 


1,014,000 


55-0 


232,000 


1844, 
1845, 
1846, 
1847, 


2,446,000 
2,646,000 
2,756,000 
3,635,000 


128 
135 
138 
177 


658,000 
718,000 
881,000 
1,101,000 


34-6 
37-7 
44-0 
54-0 


1,164.000 
1,154,000 
1 357 000 
1,587,000 


61-5 
59-1 
68-0 
78 


304,000 
318,000 
341,000 
307,000 


1848, 
1849, 


3,252,000 
3,266,000 


155 
150 


1,213,000 
1,241,000 


60-0 
57-2 


1,550,000 
1,580,000 


73-3 
72-4 


341,000 


The Lake tonnage in 1834 was 
In 1841 it had risen to only . 






. 28,521 tons. 
56,252 



1846 it was . . . . .... 106,836 

1847, . 139,399 

1848, . 166,400 

We thus see while it increased but 28,000 tons in the first period of seven 
years, it has gained 110,000 in the last, and nearly all of this since 1843. 
At the present time there is no tendency to increase. The great support of 
this trade is found in the transport of immigrants, and any diminution therein 
must be followed by a diminution in the tonnage. 

In 1842, the Steamboat tonnage on the western rivers was but 126,278, 
and the tendency was downward, as the business was very small, as may be 
seen from the number of trips made by certain boats : — 

Boats. Trips. Boats. Trips. 

1839, . . .35 . . 141 I 1841, . . . 32 . .162 

1840, . . . 28 . . 147 | 1842, ... 29 .. 88 

In 1846, only four years afterwards, it had almost doubled, the amount 
being 249,055. In the two succeeding years it increased rapidly, as may be 
seen by the following statement of boats built at Cincinnati : — 

1845-6, 5657 tons. | 1846-7, 8268 tons. | 1847-8, 10,232 tons. 

In the last year the tendency has been downward; the boats built being 
only 7281 tons; and the number of arrivals being only 3239, against 4007 
in the previous year. 

We thus meet everywhere the same results. From 1835 to 1843, scarcely 
any increase; but from that date every thing starts into life and grows with 
rapidity. Arrived at 1848 and 1849, all tends downwards, notwithstanding 
the great increase of population. 

TRADE OF NEW ORLEANS. 

The value of the principal products of the interior received at New Orleans, 
from 1841-2, to the present time, has been as follows: — 



THE HARMONY OF INTERESTS. 



25 



1841- 2, 

1842- 3, 

1843- 4, 

1844- 5, 



Total. 

$45,716,045 1845-6, 
53,782,084 1846-7, 
60,094,716 I 1847-8, 
57,166,122 I 1848-9, 



Total. 
. $77,193,464 

90,033,000 
. 70,779,000 

81,889,000 



The value doubled in six years, but it is now falling, notwithstanding the 
large increase of western population in the last two years. 

NEW YORK 

Being the place supposed to be most benefited by perfect freedom of trade, 
we may profit by an examination into the effect of the various systems, as 
exhibited in the number of houses built in that city, as compared with the 
population of the country, of which it is the commercial capital. The ear- 
liest account I have been able to obtaiu is that of 1834 : — 



1834, 

1835-41, average, 
1842, 
1843, . 
1844, 



Houses built. 

877 
943* 
912 
1273 . 
1210 



Per million of 
population. 

. 60 

58 
. 50 

69 
. 64 



Per million of 





Houses built. 


population. 


1845, . 


1980 


. 101 


1846, 


. 1910 . 


95 


1847, . 


1823 


. 90 


1848, 


. 1191 . 


60 


1849, 


1496 


68 



The rapid extension of Brooklyn has been since 1842. Had it been 
possible to obtain a similar account of that city, which is but a suburb of 
New York, the difference would have been much more striking. We have 
here, however, all that is needed to show that houses in New York grew with 
the growth of factories and furnaces, and diminished, as they now diminish, 
with the cessation of their operations. 

PHILADELPHIA. 

It is deemed desirable to give the movement of Philadelphia as the 
distributor of a large portion of the coal and iron of the Union, and as the 
centre of an important portion of the commerce between the East and the 
West ; but it is impossible to obtain the number of houses built, because of 
no such record having been preserved, by several of the districts, until quite 
recently, and to give the movement of the population in the several periods, 
it is necessary to take the returns under the State censuses, which are septen- 
nial, and those made under the authority of the federal government, which 
are decennial. The former returns give only the number of taxables, but by 
multiplying them by five the population was always found to be nearly ob- 
tained, and I have done so throughout, although it is said that the proportion 
of non-taxables has within a few years so far increased as to make it neces- 
sary to multiply by five and a half. How far that is the case will be deter- 
mined by the census of next year. 

Ratio to population 













of the Union, in 










Per cent. 


thousands to mil- 








Taxables. 


Population. per annum. 


lions. 


1821. 


State census 


27,892 


139,460 


15-3 


1828. 


U 




37,313 


186,565 increase 4-9 


15-2 


1830. 


u. s. 


u 




188,958 « -6 


14-6 


1835. 


State 


u 


49,847 


249,235 « 6-6 


ie-7 


1840. 


U. S. 


u 




258,000 « -8 


15-1 


1842. 


State 


U 


51,063 


255,315 decrease -5 


14-1 


'849. 


it 


cc 


77,285 


386,425 increase 7-4 


17-7 



• Of these the number built in 1835 and 1836, before the Compromise \ egan to have 
much effect, was greater than in any three of the other years. 



26 



THE HARMONY OF INTERESTS. 



It appears obvious that the productive power of the country diminished 
from 1835 to 1841, and still more rapidly in the two following years; and 
therefore it was that the power to pay for foreign commodities diminished so 
much that consumption could be maintained only by obtaining goods on 
credit, to be paid for at some future time, and bearing interest until paid. 
The following table will show the value op exports, being the amount of 
merchandise received from abroad in payment for merchandise and freights. 



Value of exports, per head. Debt contracted. Debt paid off. 



1821, to 1829, 


aver., $5 


* 




1830, . 


4-32 






1831, 


. 6-10 . 






1832, . 


5-51 






1833, 


. 6-20 . 






1834, . 


7-08 






1835 to 1841, 


aver., 6-02 . 


. $170,000,000 




1842-3, . 


. 4-48 


Interest unpaid. 




1844, . 


5-03 . 




Interest. 


1845, 


. 5-16 






1846, . 


5-75 . 




. " . $5,000,000 


1847, 


. 7 




5,000,000 


1848, . 


5-88 . 


8,000,000 




1849, 


. 5-19 


. 22,000,000 





With each step in the diminution of the power to produce, there is dimi- 
nished power of purchase, and hence the necessity for obtaining goods on 
credit. So it was from 1835 to 1841, and the result was almost universal 
bankruptcy. So is it at present, and the goal towards which we are moving 
would seem to be the same. The amount now required for the payment of 
interest is about $14,000,000 per annum, being $2,000,000 more than was 
required for the same purpose two years since. 

In the following table are given two species of articles, of one of which 
(flax) a large part was freed from duty by the Compromise tariff, and so con- 
tinued until September, 1841, while the other was subject to the same pro- 
visions as manufactures of other kinds. It will be seen how small is the 
difference of movement, proving that the amount of importation depends 
upon the power to import, and is but slightly affected by the question of duty. 







Manufactures 


Per 




China and 


Per 






of flax. 


head. 




earthenware. 


head. 


Sept. 30, 1821-29, 


average, 


. $3,333,000 


29 




$1,160,000 


10 


" " 1830, 




3,011,000 


23J 




1,259,000 


10 


" " 1831, 




. 3,790,000 


28£ 




. 1,624,000 
2,024,000 


m 


« " 1832, 




4,073,000 


30 




15 


« " 1833, 




. 3,132,000 


22 




. 1,818,000 


13 


" « 1834, 




5,485,000 


38 




1,591,000 


11 


" « 1835-41, 


$6,350,000- 


-£=5,080,000 


31 


1,950,000- 


-1=1,560,000 




* " 1842 to j 










June 30, 1843, / 


average, 


2,900,000 


15£ 




. 1,300,000 


7 


" « 1844, 




. 4,492,000 


23i 




1,632,000 


8* 


« « 1845, 




4,923,000 


25 f 




. 2,166,000 


11 


" " 1846, 




. 4,972,000 


25 




2,201,000 


m 


" " 1847, 




5,152,000 


25 




. 2,320,000 


ii 


« " 1848, 


$6,600,000- 


-1=5,660,000 


27 


2,600,010- 


-£=2,228,000 


10 


« « 1849, 


5,700,000- 


-£=4,750,000 


22 


2,231,000- 


4=1,860,000 





• In 1829, the debt of the Federal Government was $58,000,000. In the year 1833-4, 
it was reduced to $4,000,000, and in the following year to $37,000. As much of this was 
held abroad, the amount paid off in this period was probably equal to that of States and 
corporations transmitted abroad at the same time. 



THE HARMONY OF INTERESTS. 



27 



We see here the importation of linens increasing under the tariff of 1828, 
diminishing from 1835 to 1841, and still further diminishing in the closing 
years of the Compromise tariff. Thenceforward it rises rapidly, notwith- 
standing the increasing tendency to substitute manufactures of cotton for 
those of flax. 

In regard to China and earthenware, we see the same course of events. 
The importation rises under the tariff of 1828, diminishes under the Com- 
promise, and still furthir diminishes in 1842-3, when it begins to rise under 
the tariff of 1842, but never attains the same height as in the previous period. 

FRENCH MERCHANDISE. 

Per head. 

1822 to 1829, average, . . . . 9,130,000 81 Silks subject to duty. 

1830, 8,240,000 64 

1831, 14,737,000 1-11 

1832, 12,754,000 92 

1833, ... ... 13,902,000 1-00 Silks free. 

1834, ... . . 17,557,000 1-21 

1835 to 1841, average 25,200,000 — 20,160,000 1-24 

1842 and 1843, average, . . . 14,500,000 80 Duties reimposed. 

1844, 17,952,000 94 

1845, 22,069,000 1-13 

1846, 21,600,000 1-08 

1847, 24,900,000 1-21 

1848, . . .28,000,000—4, 24,000,000 1-14 

1849, 23,233,000 — 19,360,000 90 

"We have here the same results as elsewhere. The commodities we receive 
from France are almost altogether articles of luxury. In the period between 
1829 and 1834, there is a gradual increase, until, in 1834, the consumption 
exceeds by fifty per cent, the average from 1821 to 1829. Thenceforward 
the amount remains almost precisely the same until we reach 1841. In the 
period ending June 30, 1843, it falls to the level of fifteen years before. 
In the following year, it begins to rise, and, by 1847, attains the level of 
1834. In 1848 it falls to $1-14. In 1849, the amount, paid for, falls 
almost to the level of 1842-3. 

The remarkable part of this table is, the small increase produced by the 
abolition of duty upon silks, and the fact that the import rapidly increased 
after the duties had been reimposed. 



TEA AND COFFEE. 

The following table represents the quantities of tea and coffee retained for 
consumption rather than the actual consumption of the respective years, and 
the great irregularity of amount is more apparent than real. It is here 
shown, that the average consumption of tea in the years 1833 and 1834, 
the last two years in which the tariff of 1828 was in activity, was greater 
than that of the ensuing ten years, and that, notwithstanding the great 
increase of population, it did not rise above that quantity until 1845. Of 
coffee the consumption per head was little greater from 1835 to 1841 than 
the average of 1833 -34. 



28 



THE HARMONY OF INTERESTS. 



Tea. Per head. Coffee. Per head. 

1821 to 1829, average, pounds, 6,000,000 -53 pounds, 24,000,000 2-13 

1830, 6,800,000 -53 38,300,000 3-00 

1831, .... 4,600,000 -35 75,000,000 5-60 

1832, 8,600,000 -63 36,000,000 2-60 

1833, . . (Duty free,) 12,900,000 -91 (Duty free,) 75,000,000 5-30 

1834, .... 13,100,000 90 44,000,000 3-00 
1835 to 1841, 12,600,000 — 10,080,000 -62 89,000,000 — ], 71,200,000 4-40 
1842-1843, " 13,000,000 -71 107,000,000 5-60 

1844, " 13,000,000 -68 149,000,000 7-85 

1845, " 17,100,000 -88 94,000,000 4-82 

1846, " 16,800,000 -84 124,000,000 6-20 

1847, " 14,200,000 -70 152,000,000 7-25 

1848, " 21,000,000 1-00 145,000,000 6-90 
1849 " 13,213,000 -61 151,000,000 7-00 

The great question to be settled is — " Which is the system under which 
the labourer is enabled to obtain the largest quantity of food, fuel, clothing, 
machinery of production and transportation — protection or free trade?" 
The former is denounced as a " war upon labour and capital," and yet it 
seems clear that the power to consume all those things for which men are 
willing to labour, and in the production of which other men are willing to 
invest capital, was greater under the two protective tariffs than at any other 
period, and that it is now gradually, but certainly, diminishing. Wages are 
falling, and the result is, a diminution of immigration, and an increasing 
tendency to emigration, both accompanied by a decrease of productive power, 
to be followed by a futher decline of wages, and a further increase of 
emigration. Shipping has grown with immigration, and freights have fallen, 
but, with diminution in the former, the latter must rise, and many of the 
commodities that we have recently exported will have to remain at home, 
aud thus there will be a diminished power of importation, accompanied by 
a diminution of the public revenue, the improvement of which was one of 
the objects proposed in the adoption of the policy of 1846. How the 
different systems have thus far operated upon the receipts from import duties 
will be seen by an examination of the following table. 

CUSTOMS REVENUE, 
Derived from the import of Merchandise paid for with our Exports. 

1821 to 1829, average, ..... 18,500,000 1-69' 

1830 to 1834, ....... 24,000,000 1-75 

1835 to 1841, average, . . . $17,170,000 

Less one-fifth, for goods bought in ex- 
change for certificates of debt, . 3,404,300 



13,736,000 0-84^ 

1842 and 1843, ...... 16,400,000 0-90 

1843- 4, 26,183,000 1-38 

1844- 5, 27,528,000 1-41 

1845- 6, 26,712,000 

Add duty on $5,000,000 of debts re- 
deemed, .... 1,500,000 



1846-7, 23,747,000 

Add duty on $5,000,000 of debts re- 
deemed, .... 1,500,000 



1847-8, ...... 31,757,000 

Deduct duty on the amount of debt 

created, say $8,000,000, . . 2,400,000 



1848-9, ...... 28,346,000 

Debt created, $22,000,000— duty, . 6,600,000 



28,212,000 1-41 

25,247,000 1-23 

29,357,000 1-40 

21,746,000 1-00 



THE HARMONY OF INTERESTS. 



29 



It is here seen, that the importation of duty -paying articles increased so 
much under the tariff of 1828, that the revenue per head was greater than 
in the previous period, although the duty on railroad iron and on tea and 
coffee was abolished in 1832. The case would, however, appear much 
stronger were allowance made for the movements of specie. The period 
from 1821 to 1829 was one of great exhaustion, and the exports of 
specie exceeded the imports by an average of almost one million a year ; 
whereas, the imports of the following period exceeded the exports by an 
average of five millions a year. The total difference is therefore six millions 
a year. Had this been imported, as in the previous period, in the form of 
duty-paying articles, and had the duties on tea and coffee been retained, the 
revenue would have exceeded two dollars per head. 

With the next period, we find a great decrease in the revenue, indicating 
a diminished power to pay for foreign merchandise, resulting from dimin- 
ished productiveness in the application of labour at home. 

With 1842-3, there is a trifling increase, resulting from the action of the 
tariff of 1842, which was in operation during the last nine months of this 
short period. 

From June, 1843, to June, 1846, the amount rises to an average of 
$1-40, and maintains itself during the first three years of the period. The 
passage of the act of August, 1846, connected with the warehousing system, 
tended to reduce the amount received into the treasury in the last year of 
this period. 

With 1848, we find the average maintained, without, however, the increase 
that might naturally have been looked for in consequence of the great 
demand for breadstuffs, consequent upon the failure of the potato-crop in 
Ireland. 

In the last year (1848-9), being the second in which the tariff of 1846 
was in action, the amount of revenue derived from merchandise paid for by 
our exports has greatly declined. 

In comparing the receipts under the tariff of 1842 with those of that of 
1828, it is necessary to bear in mind, that, in the latter period, before mer- 
chandise could be purchased, there was a sum of ten millions of dollars to 
be provided for payment of interest on the debt incurred in the free trade one. 
At thirty per cent., that would have given three millions of dollars, or about 
fifteen cents per head. 

The total amount of interest now to be paid is about fourteen millions of 
dollars, and this claim must be discharged by our exports before merchandise 
can be purchased : the consequence of which must be, a great deficiency in 
future revenue. 

With these facts before us, we may now examine the different revenue 
systems that have been presented for consideration and adoption. By the 
English school it is held that, as cultivation first commences on the 
richest soils, agricultural labour is then largely paid, and the diversion of 
any portion of the population to mechanical pursuits is attended with loss. 
Observation, however, shows that the first cultivator commences, invariably, 
on the poorer soils, and that the rich lands of river bottoms, the underlying 
beds of marl, limestone, &c, are only brought into cultivation at a later 
period. The English school holds that mechanical labour must necessarily, 
because of the abundance of fertile land and consequent profitable appli- 
cation of labour, be dearer in a new than in an old country, and that 
competition can be maintained only by aid of laws restricting importation. 
It holds that double loss results from such restriction, labour being with- 
drawn from the profitable pursuit of agriculture to be given to the com- 
paratively unprofitable one of converting agricultural products into the 



30 



THE HARMONY OF INTERESTS. 



various commodities required for the use of man : also, that these per- 
sons, thus unprofitably employed, are maintained out of taxes imposed 
upon the consumers of their commodities, and that every dollar paid to the 
government on the import of articles, in part manufactured at home, is 
accompanied by the payment of five, ten, fifteen, or twenty dollars paid to a 
selected class, thus living by taxation imposed on their neighbours for their 
support. This idea may be found fully carried out in a report of the late 
Secretary of the Treasury, for 1846. It is there shown, that all the coal 
consumed in the Union costs the consumer $1-60 more than it would do 
under a system of free trade, although the average price of all the coal sold 
at Pittsburgh, Wilkesbarre, Mauch Chunk and Pottsville did not, at that 
moment, exceed $1-50. 

To relieve the consumer from this double taxation, the English school 
holds that all duties for revenue should be imposed upon articles that cannot 
be produced in the country, such as tea, coffee, &c, and that all those that 
can be produced in it, should be admitted free. Such is the theory that 
dictated the tariff of 1846, and the subsequent efforts to amend it by the 
imposition of a duty on tea and coffee. 

The other school holds that articles which can be produced at home should 
be protected, while those which cannot should be admitted free of all duty, 
and such was the view which prompted the abolition of all duties on tea 
and coffee, by the act of 1832. 

By the working of the two- systems, their value is to be judged. In the 
first eighteen months of the tariff of 1832, tea and coffee were admitted free 
of duty, with a loss to the revenue of nearly three and a half millions of 
dollars per annum, to which was to be added a great loss of duty on silks^ 
also free ; but the protection of manufactures generally was maintained, and 
the consumption of foreign merchandise liable to duty continued so great, 
that the revenue increased more rapidly than the population. In the 
succeeding period, protection gradually diminished, with a certainty of its 
total disappearance as the Compromise bill should come fully into action, and 
the productiveness of labour became so far diminished, that the payment 
into the Treasury for duties on foreign merchandise fell to an average of 
less than one-half of what it had been from 1829 to 1834. 

With the tariff of 1842, it rose gradually, and with a steady upward 
tendency ; while, as that of 1846 comes into operation, there is a movement 
directly the reverse. 

PUBLIC EXPENDITURE. 

When men live in connection with each other, they are enabled to protect 
themselves, and have little need of fleets or armies for their protection. A 
few officers can then perform the duties incident to the maintenance of 
government. They then exercise, in a high degree, the power of self- 
government. 

When they are widely separated from each other, they are unable tc 
protect themselves, and have need of fleets and armies for their protection. 
Many officers are then required for the performance of the duties of govern- 
ment, and the power of self-government is diminished. 

With the increase of fleets and armies, and of government officials, the cost 
of government is increased. 

The policy of 1828, and that of 1842, tended, as we have seen, to concen- 
tration of population and combination of exertion, and, therefore, to increase 
in the power of self-government. That of 1833 tended, and that of 1846 
tends, as has been seen, to dispersion of population and diminution in the 
power of combination, and, consequently, to diminution in the power of self- 



THE HARMONY OF INTERESTS. 



government. What has been the effect of the two systems on the public 
expenditure I propose now to show. The true " war upon labour and 
capital," is that which increases the cost of government, and thus diminishes 
the power to accumulate capital, to be used in aid of labour. Every step 
towards diminution in the expenditure for that purpose tends to raise wages; 
and every one tending towards its increase, tends equally towards diminution 
in the power of both labourer and capitalist to command the necessaries, 
conveniences, or luxuries of life. 

From 1821 to 1829, the total expenditure of the government, 
exclusive of payments on account of debts previously existing, 
was $117,000,000, being an average of .... $13,000,000 

From October, 1829, to October, 1834, the period of the 
tariflf of 1828, the total expenditure, exclusive of such pay- 
ments, was 84,000,000, being an average of . . . . 16,800,000 

From October, 1834, to October, 1841, the period of the 
Compromise, during which we colonized Texas and Oregon, the 
total expenditure was 8223,000,000. In this period there were 
no payments on account of the old debt, the whole having been 
extinguished at the close of 1S34. The average of this period 
of dispersion was ........ 31,700,000 

From October, 1841, to June 30, 1843, was a period of 
exhaustion, and the wants of the government were such as 
precluded expenditure. The average was .... 20,400,000 

That of 1843-4 was 20,600,000 

That of 1844-5, 21,400,000 

"With 1845-6, we recommence the system of dispersion. 
The occupation of Texas had brought with it war with Mexico, 
and the expenditure rose to . . 26,800,000 

In 1846-7, dispersion increased, and large armies were sent 
to Mexico for the purpose of compelling the cession of Cali- 
fornia, the consequence of which was that the expenditure rose 
to 59,400,000 

In 1847-8, it was 45,000,000 

And a large amount remained unsettled. 

In 1848-9, 46,798,000 

As a necessary consequence of this system, the public debt, which was 
extinguished under the system of concentration, grew rapidly under that of 
dispersion, to be again diminished under that of concentration, and now again 
increased under that of dispersion. 

PUBLIC DEBT. 

1821, $89,987,428 

1829, 58,421,414 ' Decrease in eight years, $31,566,014 

1834, 4,760,082 « five years, 53,661,332 

1834-5, 37,733 Extinguished. 

1841, 6,737,398 Increase in five years, 6,737,398 

June 30, 1843, 26,898,958 " two years, 20,161,560 

1845, 17,093,794 Decrease in two years, 9,805,164 

1848, 48,526,379 Increase in three years, 31,433,585 

1849, 64,704,693 « one year, 16,178,314 

CREDIT. 

With every step in the diminution of debt, credit grows ) with every one 
in the increase thereof, credit diminishes. 

The policy of 1828 increased production and raised wages. The power to 



32 



THE HARMONY OF INTERESTS. 



pay for foreign commodities was great, and the revenue was large, the conse- 
quence of which was the extinction of the public debt, at the close of 1834. 
Credit was therefore high. 

The policy of 1832-3 diminished production and lowered wages. Credit 
was high, and we obtained cloth and iron in exchange for certificates of debt; 
the consequence of which was, that, at the close of 1841, the foreign debt 
was two hundred millions, much of the interest of which we were unable to pay. 

Under the Revenue tarhT of 1841-2, public and private revenue almost 
disappeared, and bankruptcy and repudiation were the necessary consequence. 

Under the tariff of 1842, production increased and wages rose. The 
power to pay for foreign commodities increased, public and private revenue 
grew, and we commenced to diminish our debt, the consequence of which 
was the perfect re-establishment of credit. 

Under the tariff of 1846, production diminishes and wages have fallen. 
The power to pay for foreign commodities is diminishing, and we are again 
buying cloth and iron, and settling for them with certificates of debt, the 
amount of which transmitted to Europe in the two years ending June 30, 
1849, is estimated at thirty millions of dollars; all of which we have, in 
that time eaten and drunk, and used, but have yet to pay for. 

With a view to present at a glance the results obtained by this examina- 
tion of the policy of the Union, I give the following diagrams, in which the 
movement under the various systems is distinctly shown. 

No. I. gives the nine years from 1821 to 1829, when the tariff of 1828 
came into operation. 

No. II.— The years of the protective tariff of 1828, from 1829 to 1834. 

No. III.— Those of the Compromise tariff, from 1834 to 1841. In this 
case, it will be observed that I have in all cases deducted from the con- 
sumption of imported commodities one-fifth, that being the quantity obtained 
in exchange for certificates of debt. 

No. IV. — This represents the movement under the strictly revenue clauses 
of the Compromise tariff. In some cases, as will be seen, one year, and in 
others two years are included in this period. The returns for coal, railroad 
and canal tolls, &c, are made from the civil year, whereas those connected 
with commerce are made for the fiscal year ending June 30. The effect of 
taking one year, is to throw into No. III., the period of the Compromise, one- 
half portion of this period, and the other portion into No. V., the period of 
the tariff of 1842. 

No. V.— The tariff of 1842. 

No. VI.— That of 1846. 

In the diagrams representing the movements of iron, coal, cottons and 
woollens, the consumption is given in two sets of lines ; one representing the 
domestic products consumed, and the other the total quantity. An examina- 
tion of them will show, that the amount of consumption is dependent upon 
that of domestic production, and that any deficiency therein is never compen- 
sated by increase of importation, as it should be, if the theory were true upon 
which the tariff of 1846 is based. 

Consumption of Iron, Foreign 
and Domestic, in pounds per 90 
head of the population. (See 70 
page 11.) ' <><> 

40 

™ . , 30 
Total, 20 
Domestic, |q 

Railroad iron was exempted from duty in the third year of the second period, and from 
that time consumption ceased to increase. 




THE HARMONY OF INTERESTS. 



33 



Consumption of Coal, Foreign 
and Domestic, in tons per 
thousand of population. (See 
page 13.) 




Consumption of Cotton 
Goods, Foreign and Dom. 
in pounds per head of the 
population. (See page 15). 



Total, 
Domestic, 



Consumption of Woollens, 
Foreign & Dom., mi lbs. per 
head of population. (Seep. 17.) 

Total, 



Domestic, 3*s 




Production of Lead, in thou- 
sands of pigs. (See page 18.) 




Population, as shown in the 
increase of imimiy ration, in 
thousands. (See page 18.) 




5 



34 



THE HARMONY OF INTERESTS. 



ii. in. 



n. 



Shipping Built, in tons, per |j? 
thousand of population. (See j* 
page 19.) {2 



Average. 

ill 


; : - - 111 


aaS!S8§liiiil§|lS! 
l3H!iil§Siila38l 





Comparative View of the 
Movement of Immigration 
and Shipping, in thousands. 
(See page 19.) 



Shipping, 



Immigration, 




Number of Steamers built 



per million of population. 
page 19.) 





Depopulation, as shown in the 
occupation of Public Lands, 

as compared with immic/ ra- 
tion. (See page 20.) 



THE HARMONY OF INTERESTS. 



Production of Grain, in bush- 
els per head of population. (See 
page 21.) 



Production and Consump- 
tion of Sugar, Foreign 
and Domestic, in pounds 
per head of peculation. (Sec 20 
page 23.) 



Drtnestic, 



Tolls on the New York 
Canals dollars per thou- 
sand of population. (See 
page 24.) 



Tolls on Pennsylvania Pub- g 
Lie Works, in dollars per 
thousand of population. (See 
page 24.) 



Tolls on Baltimore and Ohio 
Railroad, in dollars per thou- ^ 
sand of population. (See page 




Trade on Louisvi 
Portland Canal, in t 
sands of tons (See page 2 



n them- 

*0 



350 
300 
250 










99 Average. BE3ESH 

BBBBBBBBB|g| 




200 


















150 HB 












m 




50 














■BBS 



36 



THE HARMONY OF INTERESTS. 



Lake Tonnage, in thousands 
of tons. (See page 24.) 



IV. V. YL 



Western Steamboat Tonnage, 260 
in thousands of tons. (See 240 
page 24.) » 



Value of Produce received 

at New Orleans, in millions 
of dollars. (See page 25.) 



Houses Built in New York, ioo 
per million of population. (See 
page 25.) 



Population op Philadel- a 
PHIA, in thousands. aa 



Ratio of Philadelphia to 
the Population of the 17 
Union, in thousands to mil- ie 



lions. 



(See page 25.) 




Value of Exports, per head 
of population in dollars. (See 
page 25.) 



700 



THE HARMONY OF INTERESTS. 



37 




Imports of Foreign Cotton - ™»»«-E»a ! eBBB»'BaBHBM : BsSSlaiS 

goods, -;/ /, ' » P o,t,, i Mn^amtmrnmssm 

in cents p, r hn„l „ th poinda- % ag§|B|BgaSB§SiHH§SgBgBBBi|g|g 
lion. (Seepage 15.) g EgggglglglggSSgg^SS^gS 



Of the four next following, the first two, French Merchandise and Manu- 
factures of flax, were in a great degree freed from duty in 1832, silks and 
linens being declared absolutely free. The duty was reimposed in 1841'. The 
others, Tea and Coffee, were free from duty in 1832, and so remain. The first 
two are given chiefly for the purpose of snowing how small is the increase of 
consumption consequent upon a remission of duty, compared with that which, 
in every case, we have seen to follow the production of a commodity at home. 



French Merchandise, paid for J30 ' 
in cents per head of the popu- m 
latum. (See page 26.) 



Manufactures of Flax, in 

cents per head of the popula- 
tion. (See page 26.) 




Consumption of Tea, in hun- loo 

dredths of pounds per head of » 

the population. (See page ^ 

27.) •» 

J 50 
40 
3D 




1 



—Mi 



iililll 



38 



THE HARMONY OF INTERESTS. 




m 



m 



WjfiRSm _ = 




Public Debt, in millions of 
dollars. (See page 31.) 



National Credit, in millions 220 
of dollars. (See page 31.) 200 



41 



CHAPTER FOURTH. 
HOW PROTECTION TENDS TO INCREASE PRODUCTION AND CONSUMPTION. 

Two systems are before the world : on the one hand, that which is de- 
nominated protection, and on the other that which is denominated free-trade. ' 
Each claims to be the one under which the labourer receives the largest re- 
ward for his exertions, and it is for the purpose of testing the validity of those 
claims that I have given the numerous tables contained in the last chapter, 
b} r aid of which I now propose to examine this question in its bearings on the 
various portions of society. It is the great one for the Union, for mi if are 
included all others. The discord now existing between the North and the 
South has its origin in the diminished value of the returns to slave labour. 
If it can be shown that by one and the same system the interests of the North 
and the South, the free and the enslaved, can be promoted, harmony may 
take the place of discord. The differences in regard to internal improve- 
ments by aid of the general government have their origin in a necessity for 
scattering ourselves prematurely over large surfaces. If it can be shown that 
by one and the same system the North, the South, the East, and the West, 
can be enriched, and all enabled to make roads for themselves, harmony may 
be restored. The discords so frequently existing between the employer and 
the employed, the capitalist and the labourer, the banker and his customers, 
may all, as I think, be traced to one and the same cause, and if that can be 
removed, harmony and good feeling may be restored and maintained. Every 
question affecting the peace and tranquillity of the Union, or the people of the' 
Union, will be settled whenever we shall have determined for ourselves the 
one great question — " Which is the system under which the labourer obtains 
the largest reward for his labour Y> When that shall come to be done, it 
will be seen that there is a perfect harmony of interests throughout the Union, 
and among all its people. 

Before proceeding further, I would urge upon the reader a careful examina- 
tion of those tables, bearing always in mind the precise position of the ques- 
tion that is to be discussed. It is admitted by all that protection tends to 
increase the domestic production of the commodity protected. That, there- 
fore, does not require to be proved. It is asserted that protection tends to 
raise the price of the protected article and to diminish the power of consuming 
it, whereas the removal of protection diminishes its cost and increases the power 
of consumption. That is denied, and that it is which requires to be proved. 
If this assertion be true, then the power of consumption must diminish with 
protection. We see, however, that the consumption of iron, of coal, of 
cotton, and of wool, increased with great rapidity in the years between 1830 
and 1834, and in those from 1843 to 1847. If it be true, the quantity 
of men and things passing on the roads and canals, and the number of ex- 
changes to be performed in our cities, should diminish with protection, 

6 » 



42 



THE HARMONY OF INTERESTS. 



whereas they increased with great rapidity in both of the above-named 
periods. If it be true, then it must reduce the wages of labour, and thus 
diminish the inducements for foreigners to come among us and occupy our 
vacant lands, whereas immigration increased with great rapidity under both 
protective tariffs. If it be true, then it must diminish oar power to trade 
with foreign nations, and the inducements to build ships, whereas shipping 
grew with great rapidity in both those periods. 

If, now, we examine the period between 1834 and 1843, it is impossible 
to avoid being struck with the fact that the power to consume foreign pro- 
ducts not only did not increase as domestic production diminished with the 
approach to free trade, but that it was actually less in quantity than undei 
the system of protection. The building of furnaces and rolling-mills was 
stopped, yet we consumed less foreign iron than before. So was it with 
cotton goods, the import of which fell from above fifty millions of yards 
down to eight millions. We killed off our sheep, but the importation of 
.foreign cloth diminished. We prevented increase in the domestic consumption 
of cotton, but shipping did not grow with the increased necessity for depending 
on foreign markets. We adopted a course that we were assured would raise 
the wages of labour, but immigration ceased to grow. So is it now. The 
building of cotton-mills is stopped, but our whole import of last year, in 
which we incurred a debt of twenty-two millioms, but little exceeded a pound 
per head. We have closed furnaces and rolling-mills, but we consume far less 
iron than before. We have abolished the system that was regarded as "a 
war upon labour and capital," yet immigration is diminishing and there is no 
demand for capital. Steam-engines are idle, and there is no demand for new 
ones, except for a few steam-vessels. Railroad tolls are diminishing, and steam- 
boats on the Western waters are idle. Iron is low in price, but it is not 
wanted. So is coal. So are cottons and woollens. So is almost every de- 
scription of merchandise. The power of consumption is diminishing, because 
the demand for labour and capital has largely diminished. 

The power of the people to pay taxes for the support of government is 
dependent upon their power to consume commodities that are taxed, and if 
protection diminished wages, it must of course diminish revenue ; but when 
we examine the facts, it is shown that, notwithstanding a great increase of the 
free-list, the revenue increased under the tariff of 1828, and fell off so much 
afterwards that the government was compelled almost to beg for loans in the 
markets of Europe. With the tariff of 1842 it grew rapidly, but with that 
of 1846 it is diminishing in actual amount per head, notwithstanding the 
purchase of more than twenty millions of goods on credit in a single year. 
If that debt were now called for, the revenue of the current year would not 
exceed that of 1842. 

The question to be settled is — " Does the power to import grow with the 
diminution in the power to produce that follows the withdrawal of protection ? w 
If it does, the facts must prove it. There is no question that the power to 
produce iron and cloth grows with protection. That is, as I have already 
said, admitted by all. Were it not, the facts prove it. The burden of 
proof lies, then, with the opponents of protection. To establish their system 
they must show that the power of production and consumption grows now as it 
grew three years since, and that it grew from 1835 to 1843 as it grew from 
1830 to 1834. 

The first thing that must strike all who examine the .tables in the last 
chapter is the uidve sally diminutive amount of foreign products received in 
exchange for the vast bulk of cotton, grain, provisions, &c, sent to foreign 
countries. Thus in 1842—43 the import of cotton cloth was much less than 
a yard per head of the population, and less probably than one-fourth of a 



THE HARMONY OF INTERESTS. 



43 



pound of cotton. In other years we see that it has varied from two to 
four yards, but in no single year has our consumption of cotton that has 
passed through foreign looms materially exceeded a pound per head. 

The returns from Europe received for all our products may be summed 
up nearly as follows: fifty cents' worth of iron, half a pound of wool, about 
as much flax, one or two ounces of silk, and China and earthenware equiva- 
lent to a tolerable cup and saucer, to which may be added the twisting and 
weaving of a pound and a half of cotton, per' head. To obtain all this we 
give a large portion of the land and labour of the cotton-growing States, and 
of those employed in raising tobacco and rice, together with as much food 
as would feed men, women, and children Avho could twist and weave five 
times the cotton, wool, silk, and flax we import, and the use of more capital 
in horses, wagons, railroads, engines and cars, steam and canal boats, ships, 
wharves and warehouses, than would be necessary for machinery to con- 
vert all our cotton into cloth, and make more iron than has ever been made 
in Britain, and almost as much labour as would do the work — and withal, 
we are brought in debt. It is certainly using great means for the ac- 
complishment of small ends. 

Every portion of the tables tends to prove that while the amount of 
foreign commodities received in payment for our exports increased in the 
period from 1820 to 1634, it diminished in that from 1835to 184 1 — still fur- 
ther diminished in the years 1842 and 184:1, and then rose rapidly from 
1844 to 1847, since which time it has declined. These facts seem to 
warrant the conclusion that the ability to consume (i reign products, by 
both labourer and capitalist, increased under the two tariffs of protection, 
and declined with every approach to free trade. If, now, we desire to un- 
derstand how such should be the case, it may be useful to examine how it 
is with individuals, and, doing so, we shall find that the man who prrduces 
most largely of the articles of prime necessity is always the one who can 
indulge most freely in the luxuries of life ; and vice versa, that the farmer 
who obtains from his land the least food, is the one who can least indulge 
in clothing, coffee, tea, or books. 

What is further to be remarked is, that any material increase in the con- 
sumption of foreign products, consequent upon the approach to freedom of 
trade, has appeared to be f dlowed by exhaustion and bankruptcy, while every 
increase in production at home, consequent upon protection, has been but the 
preparation for a new and larger increase — sometimes so great as to cause a 
feeling of apprehension that it was unnatural, and could not be maintained. To 
what extent this could be carried has never been ascertained, for the only 
two periods of perfect protection have each been limited to four years. To 
understand the cause of this, it would be well for the inquirer to examine for 
himself the facts that become obvious to sight, whenever and wherever a 
factory or furnace has recently been set in operation. Those presented at 
Graniteville, S. C, are thus described by a highly intelligent correspondent 
of « The New York Herald :"— 

"The effect of the erection of this manufactory in the neighbourhood is almost magical. 
Hundreds have found employment among the poor of the white inhabitants, who were, 
before, almost destitute. A Methodist and a Baptist church have been erected. A free 
school has been opened, and about 70 pupils attend. There is a large and convenient 
hotel, where I am writing this letter. The town is laid out in streets, and already over 
80 dwelling-houses, very neat and comfortable, with gardens attached, have been put up, 
which rent from $16 to §25 per annum. The girls in the factory are, some of them, very 
pretty, and are well dressed; and, from what I can learn, the change in their appear- 
ance is extraordinary. The superintendent, Mr. George Kelly, who came out here and 
placed the factory in operation, went with me through the manufactory and town. He 
informed me that he only brought with him four or five experienced persons from tha 



44 



THE HARMONY OF INTERESTS. 



North — all the rest in the factory, about 300, men, women, and children, are from the 
Sand Hills and immediate vicinity, where they, one year ago, were earning nothing. 
They make now from four to five dollars, (males.) females from three to four dollars, and 
children one to two dollars per week. Some of the girls, who are now well dressed and 
appear very intelligent, a year ago were at work in the field, hoeing corn, or ploughing 
with a horse; others were idle; now they reside in comfortable boarding-houses, where 
they pay $1-50 per week for board, and can lay up money. Their education is attended 
to, and they are on the road to become useful and productive citizens. In fact, since 
Christmas, over forty marriages have taken place between the young male and female 
operatives in the factory. They were brought together in it, became attached, and got 
married. In such a case, the wife generally leaves the factory to attend to the house- 
keeping arrangements of the new couple, and the husband continues in the factory, which 
gives them an independent support. 

" The grounds around the factory are laid out with a great deal of taste, and I have not 
seen, in a long while, a more prosperous and thriving place. New houses are going up 
every week. The applications for work are double wdiat they can possibly employ. 
They could obtain, in the district, 400 male and female operators, who are without any 
work, if they could give them employment." 

The following account by Mr. Bryant, Editor of " The Evening- Post," 
is descriptive of facts presented by a mill recently erected in Barnwell 
District, S. C: — 

" The girls of various ages, who are employed at the spindles, had, for the most part, 
a sallow, sickly complexion, and in many of their faces I remarked that look of mingled 
distrust and dejection which often accompanies the condition of extreme, hopeless poverty. 
'These poor girls,' said one of our party, ' think themselves extremely fortunate to be em- 
ployed here, and accept work gladly. They come from the most barren parts of Carolina 
and Georgia, where their families live wretchedly, for hitherto there has been no manual 
occupation provided for them, from which they do not shrink as disgraceful, on account 
of its being the occupation of slaves. In these factories, negroes are not employed as 
operatives, and this gives the calling of the factory girl a certain dignity. You would be 
surprised to see the change which a short time effects in these poor people. They come 
bare-footed, dirty, and in rags ; they are scoured, put into shoes and stockings, set at work, 
and sent regularly to Sunday-school, where they are taught what none of them have been 
taught before — to read and write. In a short time, they become expert at their work; 
they lose their sullen shyness, and their physiognomy becomes comparatively open and 
cheerful. Their families are relieved from the temptations to theft and other shameful 
courses which accompany the condition of poverty without occupation.' " 

He adds that " at Graniteville, in South Carolina, about ten miles from the Savannah 
river, a little manufacturing village has lately been built up, where the families of the 
crackers, as they are called, reclaimed from their idle lives in the woods, are settled and 
white labour only is employed. The enterprise is said to be in a most prosperous con- 
dition." 

"The buildings are erected here more cheaply," he continued; "there is far less ex- 
pense in fuel, and the wages of the work-people are less. At first, the boys and girls of 
the ' cracker' families were engaged for little more than their board ; their wages are now 
better, but they are still low. I am about to go to the North, and I shall do my best to 
persuade some of my friends, who have been almost ruined by this Southern competition, 
to come to Augusta and set up cotton mills." 

The labour employed in building these mills was clear profit. The 
men and their families were there, and they had to be supported by some- 
body, whether they worked or not. All the labour employed in working 
the mills is profit. The people have begun to produce. From unpro- 
ductive consumers they have become productive consumers. In their 
former condition they could consume scarcely any clothing, or utensils 
requiring iron for their manufacture, or furniture, or books, or newspapers — 
scarcely any thing, indeed, but food. Having become productive, the 
whole surplus may go to the purchase of other things than food, and thus is 
made a market for cloth and iron and other commodities, that before had no 
existence. Every producer is a consumer to the whole extent of his pro* 
duction, and by enabling these poor people to produce more, the planter 



THE HARMONY OF INTERESTS. 



45 



makes a market on the land for the products of the land, to the extent of the 
whole excess of production. The more that is produced, the more must be 
consumed. 

This assertion may at first appear to be one of doubtful truth, yet a 
little examination will, I think, suffice to establish its perfect correctness. 
The man who earns six dollars a week, lays by one of them* which he carries 
to the saving-fund, which lends it and other similar dollars to some one who 
desires to build a house. He pays it out to workmen who purchase with 
it food and clothing, and thus is that surplus dollar consumed. The capi- 
talist, with his savings, builds houses, or ships, or factories, and the work- 
men whom he employs purchase food and clothing, and the use of houses, 
with his money. The average consumption of a year always is and must 
be equal to the average production, and if we desire to Know the extent of 
the one we have but to ascertain that of the other. 

In 1839 we imported forty-three millions of yards of cotton cloths of 
various kinds, the consumers of which were customers to the planter to the 
extent of eleven millions of pounds of cotton, or less than 28,000 bales, being 
as much as would be worked up by twenty-eight mills of moderate size, or 
fourteen of larger size. To produce those mills in any single cotton-growing 
State would require no effort whatsoever, and when produced it would be 
found that they would be all profit, for it would be attended with not the 
slightest diminution in the amount of agricultural production. The labourers 
are there, and a large portion of their time is absolutely waste. The horses 
and wagons are there, to a great extent unemployed. The timber is there, 
encumbering the best lands of the plantation. The men and the horses 
must be fed, and the wagons must be kept in order. Make a market foi 
this waste labour, and the labourers will consume more food, but the chief 
increase of expenditures will be in clothing, thus making a market for cot- 
ton — in houses, making a market for stone and lumber — in furniture, for 
which lumber will be required — in bocks and newspapers, making a mar- 
ket for rags — and the cloth-makers, and carpenters, and masons, and cabinet- 
makers, and paper-makers, and printers, will want cloth, and shoes, and 
houses, making a further market for cotton and leather, and lumber and 
stone. Exchanging thus on the spot, each and every man would be a pro- 
ducer, whereas \^en exchanges are made at great distances, the transporters 
and exchangers are more numerous than the producers, and as consumption 
must go to the extent of production, and can go no further, we may now see 
why it is that consumption tends to increase so rapidly when men work in 
combination with each other. 

In four years we erected mills that worked up 300,000 bales of cotton, 
or eleven times as much as was contained in all the cloth imported in 
1839. To have created treble that number would have required no effort, 
nor would it have been attended with any loss of agricultural products, for 
the labour was being wasted in every county of the South and West : and 
to carry them on would now be attended with no diminution in the product 
of food or cotton, for treble the labour required for a factory is now being 
wasted in almost every county of the Union, and in every one south of New 
England. To the labour-power of men and horses, and women and children, 
now absolutely unemployed, let us add the quantity that is wasted on the 
road, and to that let us add the manure now wasted on the road, and then 
we may form an estimate, but even then a very insufficient one, of the in- 
creased product that would have resulted from the creation of those mills. 
Let us then reflect that all these people are now fed, and that their surplus 
earnings would be applicable to the purchase of other things than food, and we 
may then see w r hat would be the extent of the market thus made on the 
land for the products of the land. 



46 



THE HARMONY OF INTERESTS. 



A great error exists in the impression now very commonly entertained in 
regard to national division of labour, and which owes its origin to the English 
school of political economists, whose system is throughout based upon the 
idea of making England "the workshop of the world," than which nothing 
;;ould be less natural. By that school it is taught that some nations are 
fitted for manufactures and others for the labours of agriculture, and that the 
latter are largely benefited by being compelled to employ themselves in the 
one pursuit, making all their exchanges at a distance, thus contributing 
their share to the maintenance of the system of "ships, colonies, and com- 
merce." The whole basis of their system is conversion and exchange, and 
not production, yet neither makes any addition to the amount of things to 
be exchanged. It is the great boast of their system that the exchangers are so 
numerous and the'producers so few,* and the more rapid the increase in the 
proportion which the former bear to the latter, the more rapid is supposed to 
be the advance towards perfect prosperity. Converters and exchangers, 
however, must live, and they must live out of the labour of others : and if 
three, five, or ten persons are to live on the product of one, it must follow 
that all will obtain but a small allowance of the necessaries or comforts of 
life, as is seen to be the case. The agricultural labourer of England often 
receives but seven shillings a week, being the price of a bushel and a half 
of wheat. 

Were it asserted that some nations were fitted to be growers of wheat and 
others grinders of it, or that some were fitted for cutting down trees and 
others for sawing them into lumber, it would be regarded as the height of 
absurdity, yet it would not be more absurd than that wnich is daily asserted in 
regard to the conversion of cotton into cloth, and implicitly believed by tens of 
thousands even of our countrymen. The loom is as appropriate and neces- 
sary an aid to the labours of the planter as is the grist-mill to those of the 
farmer. The furnace is as necessary and as appropriate an aid to the 
labours of both planter and farmer as is the saw-mill, and those who are 
compelled to dispense with the proximity of the producer of iron, labour to 
as much disadvantage as do those who are unable to obtain the aid of the 
saw-mill and the miller. The loom and the anvil are, like the plough and 
the harrow, but small machines, naturally attracted by the great machine, 
the earth, and when so attracted all work together in harmony, and men 
become rich, and prosperous, and happy. When, on the contrary, from 
any disturbing cause, the attraction is in the opposite direction, and the 
small machines are enabled to compel the products of the great machine to 
follow them, the land invariably becomes poor, and men become poor and 
miserable, as is the case with Ireland. 

To those who doubt the extent of the loss resulting from this unnatural 
division of labour, I would recommend a visit to any farm at a distance of 
thirty or forty miles from a furnace or a factory, that they may there, on the 
ground, satisfy themselves of the fact. They will there see days perpetually 
wasted for want of means of occupation — and other days on the road carrying 
to market small amounts of produce — and general listlessness resulting from 
the want of stimulus to activity, on the part of the men, while children, 
male and female, are totally unemployed, and the schoolmaster remains 
abroad for want of means to pay him when at home. As a general rule, 

* " Out of 3,400,000 families in Great Britain in 1831, but 960,000 were engaged in 
agriculture, the work of production. Between 1831 and 1841 the number of adult males 
increased 630,000, but the number of those employed in agriculture diminished 19,000. 
The town population, that which lives by the work of conversion and exchange, is steadily 
increasing in its ratio to the producing population, and as a necessary consequence there 
is a steady increase of poverty, vice, and crime. 



THE HARMONY OF INTERESTS. 



47 



our farmers attach scarcely any value to time. They go to a distant market 
in preference to sellinq- at a nearer one, when the difference of price to be 
obtained upon their few pounds of butter, or baskets of vegetables, appears 
utterly insignificant compared with the loss of time and labour, and they do 
this because labour is to so great an extent totally valueless. Let the in- 
quirer look to these things for himself, and let him then add the enormous 
proportion of the labour that is misemployed in badly cultivating large sur- 
faces instead of small ones — in keeping up fences and roads entirely d;s- 
proportioned to the product of the land — and finally let him add the waste of 
intellect from the want of proper instruction and frequent communication 
with their neighbour men — and then let him determine if the loss is not five 
times over as great as would pay for all the cloth and iron — raw material 
included — consumed upon the farm. Place the mill there, and all this is 
saved. The farmer and his horses and wagon are employed in hauling 
stone and timber for the mill and for houses, and his children find employ- 
ment in the mill, or in the production of things that can be used by I hose 
who work in the mill, and all their extra earnings may go for cloth and 
iron, for food they had before. I say all, for with the mill come improved 
roads, and the facility of sending to market the many things for which a 
market on the land cannot as yet be made. 

The mill and furnace, and the coal mine, are saving-funds, in which the 
people of the neighbourhood deposit the labour and the things which other- 
wise would be waste, and where these depositories exist, farmers and 
planters become rich. Where they do not, they remain poor. To those 
who desire to understand the wonderful effect of the daily deposit of small 
quantities of labour, I would recommend an examination of the saving-fund 
system of Europe and this country. Thev will there see how much can be 
accumulated from small savings when a safe place of deposit is offered, and 
thence can form a judgment of how much is liable to be wasted for want of 
such institutions. The people of New England have saving-funds in which 
they deposit what would be otherwise the waste labour of themselves, their 
horses and wagons, their sons and their daughters, and much of the produce 
that would otherwise be wasted, making by the very act a market on the 
land for the products of the land, and thus are enabled to save the manure, 
and they grow rich because of these economies. The people of other 
States waste labour, and water-power, and produce of various kinds, and 
then they destroy their timber for want of a market for it, and they waste 
their manure, and thus it is that they remain poor because of this extrava- 
gance. One cent per day for each person of the nation is almost eighty 
millions of dollars in a year. Is there not wasted, for want of a demand for 
it, labour to quintuple that sum per head ? If so, the amount is four hundred 
millions of dollars, or forty times the price — raw material included — of all 
the cotton cloths we can afford to buy from abroad. 

Were all this saved, it would make a market for four hundred millions 
of dollars of cottons and woollens, of linens, iron, hardware, agricultural im- 
plements, coal, and all of the thousand other things required for the comfort 
and enjoyment of Life. I say four hundred millions of those things, for food 
they had before, and as they are all consumers to the whole extent of their 
production, they must expend almost the whole extra production in other 
things than food. To the extent of these four hundred millions they would 
be customers to the land and its owner, for the earth is the sole producer. 

Should the inquirer desire to view the effect of this waste of labour, on a 
large scale, he could not now do better than visit the valley of the Schuyl- 
kill. Doing so, he would find there all the labour and all the machine- 
power requisite for the production at market of 60,000 tons of coal per week, 



48 



THE HARMONY OF INTERESTS. 



worth about $240,000. The quantity that will go to market this year will 
be about 30,000 tons per week, worth $120,000. Here is a diminution in 
the article of coal alone, to the extent of six millions of dollars, and if we 
were to add the loss from iron it would increase greatly the amount. Having 
ascertained this, if he should then inquire what was being produced to 
make amends for this, he would find it literally nothing. The men are 
there, and their wives and families are there, and they must have food, and 
that they may obtain it hundreds and thousands are cultivating potato 
patches ; but the whole value produced to take the place of the coal and 
iron not produced, is so small as scarcely to be worth the slightest notice. 

The labour-power now being wasted in that valley is more than would 
pay for all the iron and coal we have imported, and for which we have to 
pay in wheat or cotton. If, now, we follow this six millions, we can find it 
everywhere diminishing the power of the labourer and the miner to con- 
sume food or cloth, to the loss of both farmer and planter — diminishing the 
demand for the labour, and consequently the reward of the labourer and of the 
mechanic — diminishing the power of railroad owners to construct new roads, 
and thus again diminishing the demand for labour, and the power to pay 
for cloth or food : and thus may it be traced, step by step, throughout the 
whole nation, every interest taking its share of the Joss. 

Let the inquirer next visit a factory of any kind, and he will see that the 
whole value of the labour there employed is a creation that owes its existence 
to the fact that the mill has been built to be a saving-fund in which each 
family may deposit the labour, physical and mental, that would otherwise 
be wasted, receiving in exchange the cloth, the hats and « ats, the shoes and 
stockings, the books and newspapers, that could not otherwise have been 
obtained. Let him then trace these savings, and he will find them pro- 
ducing an increased demand for food — and better food — a demand for cotton, 
and wool, and iron, and fuel, and all other of the products of the earth, to 
the benefit of every owner or cultivator of land, whether farmer or planter. 

The people of New England save labour, and doing so they grow rich, 
and are enabled to make roads by which they travel rapidly to market, and 
they save the refuse of their products, which goes back upon the land, and 
that also grows rich. The people of the South and West, for want of such 
labour-saving-funds, waste more time than would pay many times over for 
ail the cloth and iron they can consume ; and then they are unable to make 
roads, the consequence of which is that the conveyance to market is costly 
They have to go to a distance for the performance of every exchange, how- 
ever small. Their necessities for making roads are great, but their -power 
to make roads is small. They waste all the refuse of their land, which is 
exhausted, and then they run away to other lands, increasing their necessi- 
ties and diminishing their power. 

But, it is asked, cannot too much coal and iron, cotton, w T heat, and other 
of the good things of the world be produced — more than can be consumed ? 
Those who ask this question do not recollect that every man is a consumer 
to the whole extent of his production. The more coal and iron are produced, 
the more wheat and cotton are consumed. The more wheat and cotton are 
produced, the more coal and iron are consumed. Consumption and production 
go hand in hand, and when there is a glut of any thing it is the result of 
error in the system that requires to be corrected. 

Coal is now superabundant. The market is overloaded with a quantity 
smaller than that which was readily consumed two years since, and less by 
one-third than would be now required, had the power of consumption in- 
creased at the same rate as during the period from 1843 to 1847. The 
friends uf the existing system point to the trivial import of foreign coal, and 



THE HARMONY OF INTERESTS. 



40 



say that the cause of diminished product cannot there be found. They are 
right, but in so saying- they condemn the system. The duty on coal was 
reduced in order that the labourer might obtain fuel more readily, but it has 
become so much more difficult to procure it that the consumption is already 
sensibly diminished, with every prospect of a further diminution. The 
total import of iron, and of cotton cloth, is as nothing compared with the 
growth of the product in the years from 1843 to 1847, and thus we see th it 
the supply diminishes instead of increasing in its ratio to population, under 
a system that was to enable the labourer, and the farmer and planter, more 
readily to obtain cloth and iron. 

It is not so much that coal needs protection for itself — or that iron or cot- 
ton need it for themselves — but that each needs it for the other. The producer 
of coal suffers because the furnace is closed, and the producer of iron suffers 
because the factories are no longer built, and the maker of cloth suffers be- 
cause labour is everywhere being wasted, and the power to buy cloth is 
diminished. The harmony of interests — agricultural and manufacturing — 
is as perfect as is that of the movements of a watch, and no one can suffer 
without producing injury among all around. The grower of cotton suffers 
when the operatives in cotton factories and the workers in mines and fur- 
naces are unemployed, and the latter suffer when adverse circumstances 
diminish the return to the labour of the farmer and planter. 

There are more labour and the products of labour wasted in the States 
south of Mason and Dixon's line, than would, ten times over, convert into 
cloth all the cotton they produce, and more in the States north of it, than 
would, ten times over, produce all the iron made in Great Britain. This 
may appear a large statement, yet it is less than the truth, as will be clearly 
seen on examination. If evidence of this be desired, look to the fact 
that the manufacture of cottons and woollens doubled in five years — 
and that of iron, which in 1843 was under 250,000 tons, reached nearly 
800,000 in 1847. Did this diminish the products of agriculture? Was 
not, on the contrary, the supply greater than was ever before known ? We 
added at least two hundred millions in manufactures, not only without 
diminution elsewhere, but with a larger increase than had ever before taken 
place, and it was precisely when the home consumption had become so im- 
mense that the assertion was made that we had three hundred millions of 
bushels of food for which we needed a market. All this labour was saved 
labour, and much of the things employed would otherwise have been wasted. 

Look next to the other fact, that it was precisely when the growth of 
manufactures was arrested, from 1835 to 1839, that the supply of food be- 
came so short that, notwithstanding diminished consumption consequent 
upon high prices, we were compelled to import wheat to the amount of 
more than four millions of dollars in a single year, and it will be seen if 
the experience of the two periods — 1S35-'41, and 1844-'47 — does not 
prove conclusively that the nearer the loom and the anvil are brought to the 
plough, the larger is the return to the labours of the ploughman. Could it 
be otherwise? The nearer the place of exchange, the less of labour and 
manure are wasted on the road, and the more uninterruptedly is labour 
applied, upon a machine constantly increasing in its powers. The demand 
for lumber enables the farmer to sell his trees, and with the product he 
drains his land, and thus is enabled to cultivate more and better land. The 
more distant the loom and the anvil, the more labour and manure are wasted" on 
the road, the less of both can be given to the land, and the best lands neces- 
sarily remain encumbered with trees thai are valueless, because the labour 
of clearing them is more than they are worth when cleared. 

That the reward of the labourer advances under the protective system is 

7 



50 



THE HARMONY OF INTERESTS. 



obvious from the fact that immigration increases. Men go from low wages 
to seek high ones. From 1829 to 1834 immigration grew. Thence tc 
1843 it was almost stationary. Thence to the present time it has increased 
with vast rapidity. Henceforward, if the existing system be maintained, 
it mast diminish, for the power to obtain food and clothing, fuel and house- 
room, wages, hasdeclined. 

That the productiveness of labour increases is obvious from the rapid 
growth of canal and railroad toils, and their stationary condition with every 
approach to the policy that tends to the separation of the loom and the anvil 
from the plough and the harrow. So again with the growth of steamboats, 
and of vessels generally. The more there is produced, the more can be 
consumed, and the more will go to market. 

There is, as it appears to me, no single point of view from which we re- 
gard the facts now passing before our eyes, in which we shall not find con- 
firmation of the correctness of these views. Were all the machinery now 
used in Lowell and Providence, for the manufacture of coarse cloths, taken 
out and replaced by that fitted for making fine cloths, and muslins, and silks, 
the product would be ten times as much as we now import, with little 
increase in the quantity of labour employed. Were all that coarse ma- 
chinery then distributed throughout the South, it would enable the people 
of Southern States to con vert into cloth three hundred thousand additional bales 
of cotton, not only without diminution in the agricultural export, but with 
an increase, for labour would then be more advantageously applied. To 
accomplish all this, by building mills and making machinery, would require 
an amount of la,bour equal to but a very small portion of that which is now 
wasted in a single year, and not as much as is this year wasted in Penn- 
sylvania alone. 

The people of the North would then have called into action a higher de- 
gree of intellect than is now required, and wages would rise, and the 
consumption of woollen and cotton cloth, of silks, and of sugar, and tea, and 
coffee, would grow rapidly. The people of the South would find the same 
effects. Their own consumption of cotton would be quintupled, while they 
would consume more and better food than now. They would need better 
houses, and the demand for timber and stone would clear their land, and 
wealth and population would give them better roads, and the men who came 
to make roads would eat food and wear coarse cottons, and thus the planters 
themselves would be enabled to become large customers for the fine ones pro- 
duced in the North. 

Consuming more tea and coffee, the producers of those articles would be 
able to purchase more cotton, and thus the planters' market would grow on 
every hand. The demand for machinery, for furniture, and for thousands of 
other things, would produce new improvements in manufactures, and the 
producers of tea and coffee, sugar and cotton, would be enabled to consume 
more largely of them, while the makers of machinery and furniture would 
need more iron, more lumber, and more cotton.* 



* I take me following from The Cincinnati Gazette, as evidence of the vast amoun a. 
smaller articles, composed of things that would be wasted, and prepared, much of it, by 
labour that would be wasted but for the proximity of a market : — 

"What our larger manufactures for the South are, is well understood, especially by 
persons familiar with the machinery of sugar plantations. Our small manufactures, con 
sisting of bagging, buckets, tubs, ploughs, &c, are less known. The exports of some of 
these for four seasons, will serve to show uoth the requirements of the South in this 
respect, and our ability to supply them. 



THE HARMON V OF INTERESTS. 



51 



On the other hand, let us suppose the cotton mills closed, and the supply 
of cloth diminished to the extent of all that is produced from 600,000 bales 
of cotton — the furnaces closed, and the supply of iron diminished to the 
extent of 800,000 tons — and the coal mines closed, and the supply of fuel 
diminished to the extent of three millions of tons — could we import and pay 
for the deficiency ? Would the whole cotton crop then bring more than we 
now obtain for three-fourths of it? It would not. Our power to import 
foreign cloth and iron, and fuel, would not only not be increased, but il 
would be diminished, and we should consume one pound of cotton per head 
instead of ten or twelve. The power to pay for all the cotton and iron pro- 
duced at home, results from the saving of labour, and with the disappear- 
ance of the power to save that labour would disappear the power to consume 
what are now its products. Union between the producer and the consumer 
at home, would, therefore, appear to be more profitable than union with 
people abroad and disunion among those at home. 

CHAPTER FIFTH. 

WHY IS IT THAT PROTECTION IS REQUIRED ? 

If all the labour employed in converting food and cotton into cloth, and 
food, ore, and fuel into iron, be really saved labour — if the whole result be 
really profit — why is it that men should require protection to enable them to 
produce cloth and iron? The question is a natural one, and should be fully 
answered. 

It is because it is saved labour, and because the loom and the anvil are 
merely subsidiary to the plough and the harrow that protection is required. 
The first and great object of man is, to obtain food and the materials of 
clothing for himself and family. Neither is fit for use in the form in which 
it is yielded by the earth — the great machine of production. The grain 
requires to be ground, and the wool to be spun and woven. He pounds 
the one and his wife endeavours to convert the other into cloth of some 
description, however rude. They work with bad machinery, and they 
lose much time, and yet the loss is less than would be the case were they 
to carry the grain to the distant flour-mill, or the wool to the yet more distant 
woollens-mill. By degrees population increases, and the blacksmith comes to 
exchange horse-shoes for food. The carpenter comes to exchange labour 
for food. The saw-miller comes to exchange the labour of himself and his 





1845-'46. 


1846-'47. 


1847-'48. 


1848-'49. 


Alcohol, bbls 


1,615 


1,844 


1,771 


3,022 


Brooms, doz. .... 


1,584 


5,108 


3,760 


3,333 


Bagging, pieces 




8,867 


12,632 


15,910 


Candles, boxes 


6,757 


16,622 


29,180 


39,640 


Cooperage, pieces 


18,388 


41,121 


36,924 


55,617 


Lard oil, bbls. 


1,690 


6,199 


8,277 


9,550 


Linseed oil, bbls. 


455 


6.032 


3.878 


3,020 


Soap, boxes . . . 


2,708 


10,080 


11,295 


11,308 


Starch, boxes .... 


2,499 


5,826 


8,179 


7,904 










29,417 


Sundry manufactures, packages 


7,957 


22,251 


42,418 


94,934 



« These small manufactures are too often overlooked by persons from abroad who sur- 
vey this populous city, and wonder how it came and what it is doing out here in the 
heart of what was nothing but a wilderness half a century ago. But they really consti- 
tute, as every one familiar with them knows, one of the main elements of our prosperity. 
And behind them lie many others, contributing their share to our comforts and our 
growth, which as yet enter only slightly into our export trade, and consequently are not 
included in our commercial tables." 



52 



THE HARMONY OF INTERESTS. 



machine for food. In all these cases we see combination of action, and 
with its growth men obtain horse-shoes and houses more readily than 
before. Next the little grist-mill comes, and the miller gives the labour of 
grinding in exchange for food to eat. Again, the little woollens-mill comes, 
and the miller gives his labour to the carpenter and saw-miller for labour 
and lumber, to the blacksmith for his iron work, and to the farmer for food 
and wool. Next the little furnace comes, and the furnace man, in like 
manner, exchanges with his neighbours, and with the progress of combi- 
nation of action men obtain, at every step, food, fuel, clothing, iron, furni 
ture, and houses, with increased facility. The first and great desire of man 
is that of association with his fellow-man, and it is so, because he feels that 
improvement of his condition, physical, moral, mental and political, is its 
uniform accompaniment. 

Throughout this country, there is a want of combination. Men are per- 
petually flying from each other, scattering themselves over large surfaces, 
and wasting the labour that if saved would make them rich. This inability 
to combine their exertions is the result of artificial causes ; and the adoption 
of the protective system has been produced by an instinctive effort to obtain 
by its aid that which, had those causes not existed, would have come 
naturally and without effort. 

If we now look to the early history of these provinces, we shall see the 
gradual tendency towards the establishment of furnaces, woollen-mills, &c. 
for the purpose of enabling men to combine their exertions for obtaining iron, 
cloth, and other of the necessaries of life with the least loss of labour in the 
work of transportation, whereby they might be enabled to. economize their 
own labour to be employed in the work of production, while their sons and 
daughters were obtaining wages in the conversion of wool into cotton, or 
ore into iron. 

The object of the colonial system was that of " raising up a nation of 
customers," a project "fit only," says Adam Smith, "for a nation of shop- 
keepers." He was, however, inclined to think, that even for them it was 
unfit, although "extremely fit for a nation whose government was influenced 
by shopkeepers." As early as the period immediately following the Revolu- 
tion of 1688, we find the shopkeeping influence exerted for the "dis- 
couragement" of the woollens manufacture of Ireland; and while the 
people of that unfortunate country were thus prevented from converting 
their own wool into cloth, they were by other laws prevented from making 
any exchanges with their fellow-subjects in other colonies, unless through 
the medium of English ports and English " shopkeepers." 

Such being the case, it was little likely that any efforts at combination of 
exertion among distant colonists, for rendering labour more productive of 
the conveniences and comforts of life, should escape the jealous eyes of men 
whose shopkeeping instincts had prompted them to the adoption of such 
measures in regard to nearer ones. The first attempt at manufacturing 
any species of cloth in the American provinces was followed by interfer- 
ence on the part of the British legislature. In 1710, the House of Com- 
mons declared, " that the erecting of manufactories in the colonies had a 
tendency to lessen their dependence upon Great Britain." Soon afterwards 
complaints were made to Parliament, that the colonists were setting up 
manufactories for themselves, and the House of Commons ordered the 
Board of Trade to report upon the subject, which was done at great length. 
In 1732, the exportation of hats from province to province was prohibited, 
and the number of apprentices to be taken by hatters was limited. In 
1750, the erection of any mill or other engine for splitting or rolling iron 
was prohibited ; but pig-iron was allowed to be imported into England duty 



THE HARMONY OF INTERESTS. 



53 



free, that it might then be manufactured and sent back again. At a later pe- 
riod, Lord Chatham declared, that he would not allow the colonists to make 
even a hob-nail for themselves. Such is a specimen of the system, with regard 
to these colonies. ThaJ in relation to the world at large shall now be given. 

By the act, 5George III. [1765,] the exportation of artisans was prohibited 
under a heavy penalty. 

By that of 21 George III. [1781,] the exportation of utensils required for 
the manufacture of woollens or silk was likewise prohibited. 

By that of 22 George III. [1782,] the prohibition was extended to 
artificers in printing calicoes, cottons, muslins or linens, or in making 
blocks and implements to be used in their manufacture. 

By that of 25 George III. [1785,] it was extended to tools used in the 
iron and steel manufactures, and to the workmen employed therein. 

By that of 39 George III. [1799,] it was extended to colliers. 

These laws continued in full force until the year 1824, when the prohi- 
bition as to the export of artisans was abolished, and all those relating to 
the export of machinery so far relaxed that " permission may now be had 
for the exportation of all the more common articles of machinery," discretion 
having been given to the Board of Trade, which decides upon each appli- 
cation, "according to the merits of the case." But little difficulty is 
now, it is said, experienced by merchants, who generally know as to 
what machines "the indulgence will be extended, and from what it will 
be withheld," almost as certainly as if it had been settled by act of Parlia- 
ment ; yet, it is .deemed advantageous to have it left discretionary with the 
Board, that they may have "the power of regulating the matter, accord in g 
to the changing interests of commerce."* Under this system, the whole 
quantity of machinery exported in the eleven years, from 1824 to 1835, 
averaged but two hundred thousand pounds per annum.t 

We see thus, that the whole legislation of Great Britain, on this subject, 
has been directed to the one great object of preventing the people of her 
colonies, and those of independent nations, from obtaining the machinery 
necessary to enable them to combine their exertions for the purpose of 
obtaining cloth or iron, and thus compelling them to bring to her their raw 
materials, that she might convert them into the forms that fitted them for 
consumption, and then return to the producers a portion of them, burdened 
with great cost for transportation, and heavy charges for the work of con- 
version. We see, too, that notwithstanding the revocation of a part of the 
system, it is still discretionary with the Board' of Trade, whether or not 
they will permit the export of machinery of any description. 

Had it not been that there was a natural tendency to have the producer 
of iron and cloth, and hats, to take his place by the side of the producer of 
food and wool, there could never have arisen any necessity for such laws 
as those passed in relation to Ireland and the colonies, and had that ten- 
dency not existed, the laws prohibiting the export of machinery would 
never have been required. It did exist, and it does everywhere exist, and 
.'t was for the purpose of preventing the gradual development of a natural 
state of things, and bringing about an unnatural one, whereby Great Britain 
might be made "the work-shop of the world," that those laws were passed. 
The object of protection has been, and is, to restore the natural one. 

The effect of those laws has been that of bringing about an unnatural 
division of her population. The loom and the anvil, in that country, instead of 
being second to the plough, have become first, with great deterioration in 

* Pov^r's Progress of the Nation, Vol. I. p. 320. 
f iLm. p. 323. 



54 



THE HARMONY OF INTERESTS. 



the condition of both labourer and capitalist. For a long period, Ih 3 :>t? 
engaged in manufactures made vast fortunes; while the owners of land 
were enabled to obtain enormous rents, because the consumers of food 
increased more rapidly than the producers of food. Land gradually con- 
solidated itself in fewer hands, and the little occupant of a few acres 
gradually gave way to the great farmer, who cultivated hundreds of acres 
by aid of hired-labour. The few became richer, and the many went to the 
poor-house. The value of labour, in food, was diminished, and the value 
of capital was also diminished, because both were, as they still are, shut 
out from employment on land, the only employment in which both can be 
used to an indefinite extent, with constant increase in the return to labour. 

By degrees, however, machinery was smuggled out of England, and 
artisans escaped therefrom ; and at length there arose a necessity for legaliz- 
ing the export of both, and from that time it is that manufactures on the 
continent of Europe have made great progress. The people there, however, 
have, like ourselves, laboured under great disadvantages. England had mono- 
polized machinery for so long a time that she had acquired skill that could not 
readily be rivalled ; while she had, by this improper division of her popula- 
tion, kept the price of labour and capital at a lower point — proportioned to 
the advantage with which the} T might have been applied — than among her 
neighbours. Her establishments were gigantic, and always ready to sink 
those who might undertake competition ; while the unceasing changes in 
her monetary arrangements, the necessary consequences of the colonial 
system, were of themselves sufficient to spread ruin among all the nations 
connected with her. Our own experience has been that of all the world. 

The necessary consequence of the existence of such a state of things, 
was resistance by the various independent nations of the world, in the form 
of tariffs of protection ; one of the first results of which was the modification of 
the law prohibiting the export of machinery. From that period to the 
present, she has been engaged in an effort to under-work other nations, 
despite their efforts to shut her out, and with each stage of her progress 
the condition of her operatives, as well as that of her farm labourers, has 
deteriorated. Women have been substituted for men, and children of the 
most immature years for women, and the hours of labour have been so far 
extended as to render Parliamentary interference absolutely necessary. 
That interference was opposed, on the ground that all the profit of the 
machinery resulted from the running of an additional hour. In the mining 
department of her trade, the system is the same, and it is impossible to 
read the Parliamentary Reports on the condition of her manufacturing and 
mining labourers, without being horrified at the awful consequences that 
have resulted from this effort to tax the world by monopolizing machinery. 
The moral effects are as bad as the physical ones. Frauds of every 
kind have become almost universal. Flour is substituted for cotton, in the 
making up of cotton cloths, to such an extent that, fifteen years since, the 
consumption for this purpose was estimated at forty-two millions of 
pounds.* The quality of iron, and of all other commodities, is uniformly 
reduced to the point that is required for preventing other nations from pro- 
ducing such commodities for themselves. 

By the census of 1831, it was shown that the number of families in England 
and Wales was 3,303,504, of which 1,170,000 were those of agricultural 
occupants, or of agricultural and mining labourers, producers of things to be 



* "These goods are generally smoother and more evenly made than American fabrics 
of the same cost ; but they must be used in their dry state, as in washing their appearance 
is very much changed.'" — Dry Goods Reporter, Nov. 1849. 



THE HARMONY OF INTERESTS. 



55 



converted or exchanged ; leaving 2,133,000 for the converters and ex- 
changers, and for the money-spending classes — paupers on one hand, and 
state annuitants, noblemen and gentlemen, on the other. Thus the products 
of one labourer had to be divided among three. 

By the census of 1841, it was shown that, notwithstanding an increase in 
the last ten years of 030,000 in the number of adult males, there had been 
an actual diminution of 19,000 in the number employed in agriculture, and 
thus we have almost four persons to consume the products of one. 

Since that date, the tendency has been in the same direction. The 
transporters, converters, and exchangers have been steadily and rapidly in- 
creasing in their proportion to the producers. 

With each step in her progress, she thus becomes less a producer, and 
more and more a mere exchanger, dependent upon the profits of converting 
and exchanging the products of other nations. This steadily increasing 
disproportion between the producers and the exchangers, brought about the 
state of things that led to the repeal of the com laws, sin^e the date of which 
there is an evident increase in the tendency to become a mere exchanger of 
the works of other men's hands. The amount of her trade does not grow 
with the growth required by this change. The farmer may live and main- 
tain his family out of a crop of five hundred bushels, or even less. The 
shopkeeper, to live as well, must pass through his hands five thousand 
bushels; and what is true of the individual shopkeeper is equally true of a 
nation of shopkeepers, as I will now show. 

The man who raises his own food, and sells of it to the amount of 8100, 
has that sum to be applied to the purchase of clothing and other of the com- 
forts of life. He is selling the product of his own labour. 

The man w r ho buys food to the extent of $100, and sells his products for 
$200, has but $100 to be applied to the purchase of other things than food. 
To the extent of one-half he is selling the produce of the labour of others. 

The man who buys food and leather, each to the extent of $100, must sell 
$300 worth of shoes to give him 8100 to-be applied to the purchase of other 
things than food. To the extent of two-thirds he is selling the kbour of 
others. 

So is it with nations. When they sell their own products, their power 
to purchase from others is equal to the whole amount sold. When they 
sell the products of others, w T hether in the same or any other form, their 
power of purchase is only to the extent of the difference between the price- 
paid and the price received. The bale of cotton exported as yarn, is but the 
bale imported as wool, and, to the extent of the cost of the wool, represents 
no part of the power to purchase for consumption. The barrel of American 
flour exported in the form of cloth or iron, is but the barrel of flour imported, 
and represents no part of the power to purchase coffee, tea, or sugar. 

The actual or declared value of the exports of the produce and manu- 
factures of Great Britain and Ireland, was, 

From 1815 to 1819, annual average, . . £44,000.000 
« 1827 to 1834, «« » . 38,000,000 
" 1845 to 1848, « . " . 50,500,000 

From these sums is to be deducted, in all cases, the cost of the raw material 
required to produce the commodities exported. 

The quantity of cotton manufactured in the first period amounted to 
100,000,000 of pounds per annum, and the average price was 19 pence,* 



* McCulloch's Com. Diet., art. Cotton. 



56 



THE HARMONY OF INTERESTS. 



making the whole cost about £8,000,000. The value of cotton goods 
exported was £16, 500,000, of which the raw material may have been about 
£5,500,000. 

The consumption of foreign wool was about 7,000,000 of pounds weight, 
and with Ihis exception the whole amount of the export was of domestic 
production. 

The import of food amounted to about 1,500,000 quarters, or 13,500,000 
bushels of 60 pounds weight. 

Putting together all the foreign food and raw materials required for the 
product of £44,000,000 of exports, the total cost could scarcely have ex- 
ceeded £12,000,000, leaving £32,000,000 as the value of domestic pro- 
ducts and labour exported by a population of 21,000,000, being equal to 
about £1-10 per head, or $7* 20, to be applied to the purchase of foreign 
commodities for domestic consumption. 

In the second period, the quantity of cotton manufactured averaged about 
275,000,000 of pounds, and the price had fallen to about 8c?., making the 
cost about £9,000,000. The proportion exported had somewhat increased, 
judging from the difference between the quantity as given by the official 
value, and the product as given by the declared value, and the amount 
of labour had decreased, the exports of mere yarn having risen from 
£1,200,000 to between four and five millions. The value of the raw cotton 
thus exported may have been £6,000,000. 

The quantity of foreign wool retained for home consumption had risen to 
30,000,000 of pounds, being an important portion of the quantity exported 
in the form of cloth. 

The average import of food was, as before about 1,500,000 quarters. 
If, now, we estimate the total consumption of food and other raw materials 
at £14,000,000, and deduct that sum from the amount of exports, we shall 
have remaining £24,000,000 as the value of the products and labour ex- 
ported by a population of 23,000,000, being about 21s. or $5 per head, to be 
appropriated to the purchase of foreign commodities, other than grain, for 
consumption. 

In the third period, the declared value of cotton goods exported had risen 
to about £25,000,000, and the cost of the raw cotton required for this pur- 
pose, in the year 1846, was estimated at about, . £8,500,000 
And in the year 1847, at ... 8,800,000 
For 1845 and 1848, the average was about . 7,350,000 
making a total average of £8,000,000. To this must now be added the 
wool of Australia, Spain and Germany, of which the manufacture had risen 
to 70,000,000 of pounds; the silks of Italy and China ; the hides, the in- 
digo and other colouring materials, the gold, and innumerable other articles 
used in the production of this large amount of manufactures ; and I shall be 
safe in putting the whole amount, for those years, at not less than £14,000,000, 
and it is probably much more. 

The import of flour and grain averaged about 6,250,000 
quarters, and as the last of those years amounted to about 
live and a half millions, it may be safe to assume that the 
average quantity required will not fall materially short of six 
millions, equal to fifty-four millions of bushels of sixty pounds 
each, and if the cost of these be averaged at 4s. per bushel, the 
amount will be £10,800,000* 

• 7'he amount actually expended in fifteen months is stated to have been £33.000,000. 
This, however, was an exceptional case, and my object is rather to show from the past 
what may be taken as an average of future years. 



THE HARMONY OF INTERESTS. 



57 



If, now, we add for vast quantities of live-stock, pork, 
beef, lard, butter, cheese, and other articles of food, the whole 
consumption of which was formerly supplied at home, only 1,000,000 

We shall have a total of 25,800,000 

To be deducted from the gross amount of exports, and 

leaving- only 24,700,000 

as the value of the export of the products and labour of the twenty-seven 
and a half millions composing the population of the United Kingdom, being 
about 18s. or $4*32 per head, to be applied to the purchase of sugar, tea, 
coffee, rice, spices, and numerous other foreign articles of food — for lumber, 
tobacco, foreign manufactures of every description, and for the purchase of 
the cotton, silk, wool, dye-stuffs, hides, &c. &c, required for the manu- 
facture of clothing used at home. 

We have here a constantly diminishing quantity to be applied to the pur- 
chase of various descriptions of food that from luxuries have become neces- 
saries of life, and that of the materials of clothing. It follows, of course, 
that as food is the article of prime necessity, the amount that each ex- 
pends of clothing is very small indeed ; the consequence of which is, that the 
people of England, engaged in furnishing cheap clothing to all the world, 
are not only badly fed but exceedingly badly clothed, the cost of clothing, in 
labour, being so great as to place it beyond their reach,* the amount that 
can be expended for that purpose tending rather to decrease. Whenever a 
good crop causes a large quantity of cotton to come to market, the price 
falls to the point that is necessarjr to enable the purchaser at home to ab- 
sorb the surplus that cannot be exported ; and when the crop is short, the 
consumption is limited to the quantity that can be purchased by the small 
amount to be expended. The whole sum now applicable to this purpose 
appears not to vary greatly from 2s. per head, sufficient to purchase three 
pounds at Sd., or six pounds at 4d. This will be seen by an examination 
of the following table : — 



* By reference to the report of the Assistant Commissioner charged with the inquiry 
into the condition of women and children employed in agriculture, it will be seen that a 
change of clothes seems to be out of the question. The upper parts of the under-clothes 
of women at work, even their stays, quickly become wet with perspiration, while the 
lower parts cannot escape getting equally wet in nearly every kind of work in which 
they are employed, except in the driest weather. It not unfrequently happens that a 
woman, on returning from work, is obliged to go to bed for an hour or two to allow her 
clothes to be dried. It is also by no means uncommon for her, if she does not do this, to 
put them on again the next morning nearly as wet as when she took them off. 

The evidence laid before Parliament in regard to the situation of the operatives in 
coal mines, showed that men and women, boys and girls, were accustomed to work to- 
gether in a state of absolute and entire nudity. 

The slowness with which the power of consuming other articles than clothing has 
grown is remarkable. 

In 1803, that of paper was ' 31,699,537 pounds. 

1841, with almost double the population, only . . 97,103,548 « 

The great diminution in the cost of cotton and linen cloth had been attended with a 
corresponding reduction in the cost of rags, while there had been great improvements in 
the mode of manufacture. The quantity of labour that could be exchanged against paper 
had evidently diminished. 

The consumption of candles in 1801, was .... 66,999,080 pounds. 

In 1830 it was 116,851,305 «* 

having little more than kept pace with the population. 

8 



THE HARMONY OF INTERESTS. 



Average cost of Cotton in England. Home consumption. Money price, per head 
d. s. d. 

1845 . 4| . .170 millions . about 2 4£ 

1846 .. 5 . 155 " 2 8 

1847 . 6f . . 80 ."17 

1848 . 4£ . . 170 . •" 2 3 
We see, thus, that she clothes her people at the cost of the cotton planter. 

She has a certain quantity of labour that she can give in exchange for 
cotton, and the price of the whole import is regulated thereby. If the crop is 
large, she takes a great deal for the money; if it is small, she takes but 
little ; and thus the producer not only derives no benefit from large crops, but 
is so much injured thereby, that it is actually more profitable to have one of 
2,000,000 of bales, than one of 2,700,000. Had that of the present year 
reached three millions, he would have been ruined, for freights would have 
been h gi:, while price? abroad would ha\o fallen to a lower point than has 
ever yet been reached. 

Instead of applying her labour to the cultivation of her own soil, she pu r- 
sues a course having for its object that of compelling all the farmers and 
planters of the world to make their exchanges in her markets, where shefixes 
the price for the world. Her power to apply the proceeds of labour to the 
purchase of other commodities than those of prime necessity is small, and 
gradually but steadily diminishing; and whenever the labours of the pro- 
ducer are rewarded with liberal returns, he is nearly ruined, because the 
price falls below the cost of production. 

The system is altogether so remarkable that at some future day it will be 
deemed almost impossible that it should ever have been tolerated. She has 
a certain quantity of the means of transportation and conversion, and being thus 
provided she desires that all the cotton and sheep's-wool of the world shall 
be brought to her, that it may be spun and woven, and that she may take 
toll for spinning and weaving it. The more that is brought to her the less 
of it she gives back to the producer, and the price she pays him fixes the 
price he receives from all the world. How the system works may be seen 
from the following statement : — 

1815 to 1819. 1827-1834. 1845-1846. 
Cotton consumed, lbs. . . . 100,000,000 275,000,000 596,000,000 

Value £8,000,000 9,000,000 11,400,000 

She pays for this in cotton-cloth and iron, the prices of which, at these 
periods were as follows : — 

A piece of calico, of 24 yards . . 16/6* 7/6f 6/7 

A ton of merchant-bar iron . . £11+ £7 5 £9 10 

Had the whole been paid in these, the planter would have received of 

Cloth, pieces 9,700,000 24,000,000 34,700,000 

Or iron, tons 730,000 1,250,000 1,200,000 

The additional freight, home and foreign, charges, commissions, &c, in 
the last period were, at three cents per pound, on 496,000,000 of pounds, 
say $15,000,000. For this the planter would receive, in Liverpool, 470,000 
additional tons of iron, the value of which, in Liverpool, at the present 
moment, would be about $1 1,000,000, and thus he not only gave away his 
cotton, but gave with it a large portion of the cost of transportation. The whole 
return to him for 600,000,000 was not as great as it had been to 100,000,000. 

It thus appears that notwithstanding all the improvements in manufacture, 
the planter had to give in the last period six times the quantity of cotton to 

* McCulloeh's Statistics, Vol. II. p. 70. 

■j-This is the average of the years from 1831 to 1834, as given in Burns's Commercial 
Glance, and copied in the Merchants' Magazine, Vol. XIX. p. 277. 

* Average of 1817 to 1819— Merchants' Magazine, Vol. XX. p. 337. 



THE HARMONY OF INTERESTS. 



53 



obtain three and a half times the cloth that he could have had in the first — ■ 
and six times the quantity to obtain a smaller quantify of iron. A more 
admirable mode of taxing - the world was certainly never devised. 

The result of the system is, that the productiveness of agricultural labour 
is declining in every portion of the world that does not protect itself against 
this " war upon labour and capital," as I will now show. 

Consumption is measured by production. Every man is a consumer to 
the whole extent of his production. To that point he will go, and beyond 
it he cannot go. The first of his wants is food ; next comes clothing; after 
this follow the conveniences and luxuries of life. If his productive power 
increases, his power to obtain clothing increases rapidly, because the whole 
surplus is applicable to other things than food. If it diminishes, his power 
to obtain clothing diminishes with great rapidity, for food he must have. That 
it has diminished, and is now diminishing rapidly, will, I think, be evident 
from the following facts : — 

Sixty years since, the price paid by the consumers of cotton to the pro- 
ducers of it was estimated at $40,000,000. 

From 1827 to 1834, both inclusive, the crops of the United States ave- 
raged 945,000 bales, and the home consumption about 145,000, leaving 
800,000 for export. The average price was about $40 per bale, and the 
product $32,000,000. 

In this period, India continued to produce extensively of cotton, and to 
manufacture cotton goods. The China market was not opened to the 
free traders until 1831, and it required some time to substitute the cotton 
cloth of England for the cotton and cloth of India. With every day that has 
since elapsed, the production of cotton has declined, as the manufacture has 
been passing towards annihilation. Cotton was then extensively raised in 
the West Indies, Brazil, Egypt, Africa, Mexico, and elsewhere ; and the 
total product, exclusive of that of the United States, was estimated at 
450,000,000 of pounds, or about one-fifth more than that of the Union. 
Averaging the whole at the same price, we should now obtain an annual 
expenditure, excluding our ow T n, for cotton wool, of $78,000,000. 

From 1842 to 1848, both inclusive, the crop averaged 2,080,000 bales, 
and the home consumption about 400,000, leaving 1,600,000 for export. 
Two hundred thousand of these may be given to the Zoll-verein, and 
other countries of Europe that have protected themselves against the system, 
not as the increased quantity actually taken under low prices, but as that 
which would have gone at high ones, leaving 1,460,000 for the quantity 
that may be supposed to be influenced by the system. The average price, 
during that period, was seven and a half cents, or $34 per bale, and the 
average product of the portion of the crop thus exported, $50,000,000. 

Since then, the cultivator of this most important commodity, throughout 
the world, has been ruined, and it is greatly to be doubted if the whole pro- 
duction, outside of the Union, is now more than one half of what it was thirty 
years since; but, at the utmost, it cannot exceed 270,000,000; and if we 
now assume that quantity, and, as before, put the whole at the same price, 
we shall obtain, as the amount paid for cotton, by almost the whole population 
of the world, outside of the Union, as follows : — 

For the crop of this country, . . $50,000,000 

For that of the rest of the world, . . 20,000,000 



$70,000,000 

Showing a large reduction, notwithstanding the increase in the number of, 
persons employed in its production, and the increase of those who should 
consume it, and yet the case, as here stated, does not represent the real 



60 



THE HARMONY OF INTERESTS. 



diminution in the amount paid to the producers. Of the cotton of India, 
nearly the whole value is now swallowed up in freights, and while the cost 
So the consumer is large, th.e yield to the producer is scarcely more than two 
cents per pound. A more full examination of the subject would, I believe, 
result in showing that the producers of cotton, taken as a body, do not re- 
ceive in return for all the clothing material that has to so great an extent 
superseded wool, flax, &c, from the people of the world outside of the 
limits of the Union, twenty millions of dollars more than they did sixty 
years since. 

A similar examination of the movement in regard to sugar, coffee, wool, and 
other articles, would yield the same results, for the exhaustion is every- 
where the same. The whole effect of the system is that of reducing 
the farmer and the planter — the producers of the good things of the world — 
to the condition of an humble dependence upon the owners of a quantity of 
small machinery for the conversion of wool into cloth, that they themselves 
could purchase at the cost of less labour than, for want of it, they waste 
in each and every year. 

Let us now look to the results, as exhibited in the immediate dependencies 
of England. 

With this vast increase in the importation of food from abroad has come 
the ruin of the people of Ireland. Deprived of manufactures and commerce, 
her people were driven to live by agriculture alone, and she was enabled to 
drag on a miserable existence, so long as her neighbour was content to make 
some compensation for the loss of labour by paying her for her products 
higher prices than those at which they might have been elsewmere pur- 
chased. With the repeal of the corn laws, that resource has failed ; and 
the result is a state of poverty, wretchedness, and famine, that has compelled 
the establishment of a system which obliges the landowner to maintain the 
people, whether they w r ork or not ; and thus is one of the conditions of slavery 
re-established in that unhappy country. From being a great exporter ol 
food, she has now become a large importer. The great market for Indian, 
corn is Ireland — a country in which the production of food is almost the sole 
occupation of the people. The value of labour in food, throughout a popula- 
tion of eight millions, is thus rapidly decreasing. 

From an inquiry instituted by Lord Clarendon, in 1847, and conducted 
in the most careful manner, it was ascertained that out of 20,800,000 acres 
of which the kingdom consists, there were but 5,200,000 under crop, and 
that the yield of cereal grains, chiefly oats, averaged 10 bushels (of 70 
pounds) per head, while that of potatoes was 561 pounds per head. The 
cattle amounted to 2,591,000, or less than one to three persons of the popula- 
tion ; the hogs to 622,000, or one to thirteen; and the sheep to 2,186,177, 
or one to four. Such are the products of a nation, exclusively agricultural, 
whose numbers were about one-half those of the people of the Union, at 
our last census. 

Were it possible now to ascertain the quantity of food, per head, produced 
in Great Britain and Ireland, it is probable that it would be found to be less 
than it was five years since, and that the whole quantity, foreign and do- 
mestic, was not materially greater than at that date. If so, it follows that 
the whole amount of labour expended in purchasing and fashioning the 
cotton of other lands to be given in exchange for food, is lost labour, and that 
the average quantity of food and of other commodities obtainable throughout 
the kingdom in return for any given quantity, tends downwards instead of 
upwards ; and that such is the case there is reason to believe. As evidence 
that such is the fact, we may take the expenditure for support of paupers, 
which in 1837 was £4,207,000, and for 1844, 5, and 6, averaged £5,890,000, 



THE HARMONY OF INTERESTS. 



61 



being an increase of forty per cent, in eight years. In 1S48, it had attained 
the enorm< us height of £7,800,000. If now to this we were to add the 
expenditure for the same purpose in Ireland, we should find the growth to 
be absolutely terrific. 

As a full answer to this, the English economist would point to the in- 
creased consumption of certain commodities ; but that increase is maintained, 
as we have seen, by the oppression and ruin of the agriculturist every- 
where. The whole system has for its object an increase in the number of 
persons that are to intervene between the producer and the consumer — 
living on the product of the land and labour of others, diminishing the 
pov»er of the first, and increasing the number of the last; and thus it is 
that Ireland is compelled to waste more labour annually than would be re- 
quired to produce, thrice over, all the iron, and convert into cloth all the cotton 
and wool manufactured in England. The poverty of producers exists 
nearly in the ratio in which they are compelled to make their exchanges in 
the market of Great Britain, foregoing the advantages that would result to 
them from the free exercise of the power of associating for the purpose 
of combining their exertions, and thus rendering their labour more effective. 

The manufacturers of India have been ruined, and that great country is 
gradually and certainly deteriorating and becoming depopulated, to the sur- 
prise of those of the people of England who are familiar with its vast 
advantages, and who do not understand the destructive character of their 
own system. The London Economist says :■ — 

'•Looking to our Indian empire, we cannot but be struck with the singular facilities 
which — in climate, soil, and population — it presents to the commerce of Great Britain. At 
first sight, it seems to orfer every thing that could be devised, in order to induce to a com- 
mercial intercourse almost without limit. There is scarcely one important article of tro- 
pical produce which is consumed in this country, either as the raw material of our manu- 
factures, or as an article of daily use, for the production of which India is not as well, or 
better, adapted than any other country ; while us dense and industrious population would 
seem to orfer an illimitable demand for our manufactures. Nor are there opposed to 
ihese natural and flattering elements of commerce any fiscal restrictions to counteract their 
beneficial results. Indian produce has long entered into consumption in the home 
markets on the most favourable terms; while, in the introduction of British manufactures 
into India, a very moderate duty is imposed. Yet, notwithstanding all these advantages, 
it is a notorious fact, deducible alike from the tendency which the supply of some of the 
most important articles of Indian produce show to fall off and from the stagnant, or rather 
declining, state of the export of our manufactures to those markets — and, perhaps, still 
more so, from the extremely unprofitable and unsatisfactory result which has attended 
both the export and import trade with India for some time past, — that there exist some 
great and serious impediments to the realization of the just and fair hopes entertained 
with regard to our Indian trade." 

Another writer* speaks of it as a country whose exports are rapidly 
diminishing. Sugar, he says, does not increase, while indigo decreases, 
and cotton is reduced one-third to one-half. The revenue is deficient. 
Gazerat and Cutch, which once supplied cotton to half the world, have 
almost ceased to produce it. The growth and manufacture of cotton have 
disappeared from Bengal, which once gave to the world the Dacca muslins, 
the finest in the world. Cotton fields have everywhere relapsed into 
jungle. 

1 ear after year we are told of efforts being made to increase the pro- 
duct and improve the quality of India cotton, and yet year after year the 
prospect of improvement becomes more remote, and necessarily so, because 
agricultural improvement under the existing impoverishing system is im- 



* London correspondent of the National Intelligencer. 



62 



THE HARMONY OF INTERESTS. 



possible. For a short period, premiums were granted on what is called 
free sugar — to wit, that raised by the wretched Hindoo who perishes of 
starvation, the consequence of the system- — and while that policy was main- 
tained its cultivation made some progress, but since the abolition of the re- 
strictions on slave-grown sugar, every thing tends downward.* 

Ireland and India are thus in the same condition. The West Indies are 
ruined, and Canada, Nova Scotia, and New Brunswick, now seek annexa- 
tion, that they may have protection from a system under which they are 
being ruined. The owner of land, everywhere, knows that it would be 
doubled by the change, and the labourer transfers himself to the south of 
the boundary-line, that he may find employment and good wages, which 
cannot be found at the north of it. Those who remain north of it now 
anxiously seek for admission for their grain, because protection maintains 
a market that now they cannot have. 

In the existing state of things they have to compete with the low-priced 
labour of Russia and Poland, and are ruined. They desire, therefore, that 
their competition may be with the protected farmers and labourers of the 
Union. 

Lord Sydenham, in a letter to Lord John Russell, which accompanied 

his Report on Emigration to Upper Canada, observed : 

« Give me yeomen, with a few hundred pounds each, who will buy cleared farms, 
not throw themselves into the bush, and I will ensure them comforts and independence 
at the end of a couple of years — pigs, pork, flour, potatoes, horses to ride, cows to milk — 
but you must eat all your produce, far devil a purchaser is to be found: however, the man's 
wants are 'supplied, and those of his family ; he has no rent or taxes to pay, and he 
ought to be satisfied." 

Here is the cause of the desire for annexation that now exists throughout 
Canada. There are no consumers at hand, and the farmer cannot exchange 
his corn for cloth or iron, the consequence of which is, that labour and land 
are almost valueless. So is it everywhere. Every colony therefore desires 
to separate itself from England, and all would gladly unite with these United 
States, and for no other reason than that they might have protection. 

That the colonial system is rapidly approaching its close must, I think, 
be obvious to all who take the trouble to inform themselves of the condition 
of the people of her colonies, who have been compelled to bear with it ; and 
thence satisfy themselves that the independent nations of the world must 
continue to increase and to strengthen their measures of resistance until it 
shall be ended, that thenceforth there may be perfect freedom of trade. 

It is " a war upon the labour and capital of the world." Its object is that 
of preventing the spinner and weaver fromcombining their efforts with those 



* " For many years they [Messrs. Arbuthnot & Co., of Madras] have been the most ex- 
tensive manufacturers of sugar in Southern India, converting to the extent of thousands 
of tons annually the coarse jaggery made by the ryots into the fine product which finds 
its way into the market ; but the attempt to raise the cane was first tried about two or 
three years since, and it is needless to say that no cost or skill was spared to render it 
successful. Planters were brovght from the West Indies at liberal salaries to direct the 
cultivation, and machinery of tne most complete and extensive character was imported 
from England to irrigate the soil and manufacture the sugar on the spot. No project 
could possibly be set on foot under circumstances more favourable, but the upshot is that 
the land taken in Rajahmundry and Dawlaishwarum has been relinquished, and the 
cattle turned into the fields of standing cane. * * * * 

" The question of competition to be maintained on the existing system with the West 
Indies and the countries in which slave labour prevails must rest for future consideration. 
At present we have arrived at the important conclusion, that, under the most favourable 
circumstances, we cannot hope to alter the present mode of cultivating the sugar-cane in 
Southern India.*" — Athenaum. 



THE HARMONY OF INTERESTS. 



6 



of the farmer and planter, — compelling the latter to work alone, and 
tnerefore disadvantageous^, and then to give two-thirds of the crop for the 
maintenance of horses and wagons, ships and men, brokers and merchants, 
whose services would not be needed were the system abolished. Its effects 
have been everywhere, to render men depressed and poor. Desiring to 
liberate themselves from it our ancestors made the Revolution, and the Cana- 
dians have now formed a league, induced thereto by their observance of the 
wonderful results that have been here obtained. 

Thus for, the system has been maintained at home by this power to tax 
the world for its support. India contributes three millions sterling per annum* 
but there is a gradual diminution in the power to pay. Canada and the West 
Indies have paid their share, but the connection with the former is likely 
soon to be at an end, and the latter are ruined. This country is the main 
support of the system, but that support is gradually being withdrawn, and 
when it shall be absolutely so, the destructive effects of it upon England her- 
self will become fully obvious. It will then be seen that the wealth of that 
country is really, to use the words of Carlyle, but a magnificent "sham." 
The few are rich, but the many are poor, and the mass of wealth is by no 
means great. 

The whole amount of capital invested in buildings, machinery, &c. for 
the cotton manufacture, in 1834, was estimated at twenty millions of pounds 
sterlingt or less than a hundred millions of dollars, being only double what 
has been expended in the effort to bring into activity the anthracite coal 
mines of Pennsylvania. She has also machinery for the production of a large 
amount of coal and iron, but the same quantity could be produced in this 
county in a few years, without an effort. She has made a considerable 
amount of rail-roads, but she broke down under the effort, and yet roads are 
made in that country at far less cost than here, and we have now more 
miles in operation. 

The nominal cost of her roads is great, because the prices paid for land 
are high, and large sums are paid to lawyers, conveyancers, &c, &c, 
but these are merely transfers of property, not investments of it. The real 
investment is only the labour employed in grading the road, erecting the 
bridges, and getting out the iron, and the cost of these per mile is less than 
for any well-made road in this country. The power of England to make 
investments of labour is less than half of what it was in this country from 
1844 to 1847, and less than one-third of what it would now be had the pro- 
duction of coal, and iron, and cotton goods been allowed to increase at the 
rate at which it was then increasing. Her system tends to the enrich- 
ment of the^ew, and hence there results a show of wealth far, very far, be- 
yond the realit)?-. 

The impoverishing effects of the system were early obvious, and to the 
endeavour to account for the increasing difficulty of obtaining food where the 
whole action of the laws tended to increase the number of consumers of 
food, and to diminish the number of producers, was due the invention of the 
Malthusian theory of population, now half a century old. That was fol- 
lowed by the Ricardo doctrine of Rent, which accounted for the scarcity of 
food by asserting, as a fact, that men always commenced the work of cultiva- 
tion on rich soils, and that as population increased they were obliged to 
lesort to poorer ones, yielding a constantly diminishing return to labour, and 
producing a constant necessity for separating from each other, if they would 

* - ; Altogether it has been calculated that the tribute which India pours into the lap 
of England is at least equal to three millions sterling." — Porter's Progress of the Nation, 
Vol. iii. p. 354. 

f McCulloch"s Statistics, Vol. 2, page 75. 



64 



THE HARMONY OF INTERESTS. 



obtain a sufficiency of food. Upon this theory is based the whole English 
politico-economical system. Population is first supposed to be superabundant, 
when in scarcely any part of the earth could the labour of the same num- 
ber of persons that now constitute the population of England obtain even one- 
half the same return. Next, it is supposed that men who fly from England 
go always to the cultivation of rich soils, and therefore every thing is done 
to expel population. Lastly, it is held that their true policy when abroad is 
to devote all their labour to the cultivation of those rich soils, sending the pro- 
duce to England that it may be converted into cloth and iron, and they are 
cautioned against any interference with perfect freedom of trade as " a war 
upon labour and capital." 

Colonization is urged on all hands, and all unite in the effort to force emi- 
gration in the direction needed to raise up li colonies of customers." It is 
impossible to read any work on the subject without being struck with 
the prevalence of this " shopkeeping" idea. It is seen everywhere. 
Hungary was to be supported in her efforts for the establishment of her in- 
dependence, because she was willing to have free trade, and thus make a 
market for British manufactures. The tendency of the Ricardo-Malthusian 
system to produce intensity of selfishness was never more strikingly mani- 
fested than on that occasion. 

It happens, unfortunately, that the system is without a base, the fact being 
exactly the reverse of what it is stated by Mr.'Ricardo to be. Throughout 
the world, and at all periods of time, men have commenced the work of cul- 
tivation upon the poorer soils, leaving to their successors the clearing of river 
bottoms and the draining of swamps; and the increase of population it 
has been that has everywhere enabled men tosubject rich soils to cultivation.* 
Food, therefore, tends to grow faster than population, when no disturbing 
causes exist, and in order that the increase of population may take place, 
it is indispensable that the consumer take his place by the side of the pro- 
ducer. When that is not the case, the inevitable consequence is that the 
waste of labour is great, and that the perpetual cropping of the land return- 
ing to it none of the refuse, exhausts the land and its owner, and compels 
the latter to fly to other poor soils, increasing the transportation and dimin- 
ishing still further the quantity of cloth and iron to be obtained in return to 
a given amount of labour. 

We thus have here, first, a system that is unsound and unnatural, and 
second, a theory invented for the purpose of accounting for the poverty and 
wretchedness which are its necessary results. The miseries of Ireland are 
charged to over-population, although millions of acres of the richest soils of 
the kingdom are waiting drainage to take their place among the most pro- 
ductive in the world, and although the people of Ireland are compelled to 
waste more labour than would pay, many times over, for all the cloth 
and iron they consume.! The wretchedness of Scotland is charged to over- 

* For a full examination of this question I must refer to my book, « The Past, the Pre- 
sent, and the Future." 

-f- Of single counties, Mayo, with a population of 389,000, and a rental of only 300,000Z., 
has an area of 1,364,000 acres, of which 800,000 are waste! No less than 470,000 acres, 
being very nearly equal to the whole extent of surface now under cultivation, are declared 
to be reclaimable. Gal way, with a population of 423,000, and a valued rental of 433,000/., 
has upwards of 700,000 acres of waste, 410,000 of which are reclaimable! Kerry, with 
a population of 293,000, has an area of 1,1 86,000 acres — 727,000 being waste, and 400,000 
of them reclaimable! Even the union of Glenties, Lord Monteagle's ne plus ultra of re- 
dundant population, has an area of 245,000 acres, of which 200,000 are waste, and for 
the most part reclaimable, to its population of 43,000. While the barony of Ennis, that 
abominaiior. of desolation, lias 230,000 acres of land to its 5,000 paupers — a proportion 
which, as Mr. Carter, one of the principal proprietors, remarks in his cirrilar advertise- 



THE HARMONY OF INTERESTS. 



65 



population when a large portion of the land is so tied up by entails as to 
forbid improvement, and almost to forbid cultivation. The difficulty of ob- 
taining food in England is ascribed to over-population, when throughout the 
kingdom a large portion of the land is occupied as pleasure grounds, by 
men whose fortunes are due to the system which has ruined Ireland and 
India.* Over-population is the ready excuse for all the evils of a vicious 
system, and so will it continue to be until that system shall see its end, the 
time for which is now rapidly approaching. 

To maintain it, the price of labour in England must be kept steadily at 
a point so low as to enable her to underwork the Hindoo, the German, and 
the American, with all the disadvantage of freight and duties. To termi- 
nate it, the price of labour in England must be raised to such a point as will 
prevent that competition and compel her to raise her own food, leaving others 
to consume their own, and such must be the result of the thorough adoption 
of the protective system, even by the United States alone. 

The cause of the difficulty in which England now finds herself is the 
unnatural disproportion between consumers and producers. Men are cheap 
and therefore undervalued. Establish a market for these men, and their 
value will rise, and such will be the effect in every part of Europe. We 
have seen that immigration into this country increased in the period between 
1830 and 1834, from twelve to sixty-seven thousand ; that from that period to 
1843 it remained almost stationary ; and that in the last four years it has 
more than trebled. Now, let us suppose that the system of 1828 had been 
maintained, and that the mining of coal, the smelting and rolling of iron, 
and the manufacture of cotton and woollen cloths, &c. had gone on uninter- 
ruptedly, producing a great demand for labour to be employed in the various % 
branches of manufacture, in the making of roads, the clearing of lands and 
the building of houses, and that the inducements for emigration to this 
country had been constantly increasing to such an extent as to cause the 



meat for tenants, "is at the ^ rate of only one family to 230 acres; so that if but one head 
of a family were employed to every 230 acres, there need not be a single pauper in the 
entire district; a proof," he adds, " that nothing but emplotxkxt is wanting to 
set this country to rights !" In which opinion we fully coincide. — Westminster Re- 
view. 

* Poulett Scrope, a member of the British Parliament, has inserted in the London 
Morning Chronicle seven letters of Notes of a Tour in the United Kingdom, with a view 
to ascertain whether the labouring* population be really redundant. His general conclusion 

is expressed in these terms: I have selected striking illustrations in support of the view 

I have always entertained, and which is at length obtaining very general acquiescence : 
namely, that the population of the United Kingdom is not really in excess ; that the land 
is everywhere — even in the most seemingly over-peopled and pauperized districts of 
Ireland — amply capable of repaying the employment of additional labour to an indefi- 
nite extent, if only judicious use be made of it by those whom the law has intrusted with 
its ownership, and that the law itself be so modified as to encourage, instead of discour- 
aging, improvement, to secure to industry its due reward, and to neglect ind mismanage- 
ment its fitting punishment." 

The notes on Ireland, afford a frightful picture of one of the many evils with which 
that country is afflicted : 

" In Gahvay Union, recent accounts declared the number of poor evicted, and their 
homes levelled within the last two years, to equal the numbers in Kilrush — 4,000 families 
and 20,000 human beings are said to have been here also thrown upon the road, house- 
less and homeless. I can readily believe the statement, for to me some parts of the 
country appeared like an enormous graveyard — the numerous gables of the unroofed 
dwellings seemed to be gigantic tombstones. They were, indeed, records of decay and 
death far more melancholy than the grave can show. Looking on them, the doubt rose 
in my mind, am I in a civilized country? Have we really a free constitution? Can 
such scenes be paralleled in Siberia or Caffraria?" 

9 



66 



THE HARMONY OF INTERESTS. 



ratio of increase from 1830 to 1834 to "be maintained, and see what would 
have been the result. By the year 1839 it would have reached 300,000, 
and five years after it would have exceeded a million, and the growth would 
every year have been more rapid, for the demand for labour would have in- 
creased faster than the supply. 

Before this time, the flight from Great Britain and Ireland alone would 
have far exceeded half a million per annum, and what would be the effect 
of such a state of things may be conceived by those who read the following 
article'which I take from the London Times. 

The flight of a quarter of a million inhabitants of these islands to distant quarters of 
the world in 1847, was one of the most marvellous events in the annals of human mi- 
gration. The miserable circumstances under which the majority left their homes, the 
element traversed in quest of a refuge, the thousands of miles over which the dreary pil- 
grimage was protracted, the fearful casualties of the voyage by shipwreck, by famine 
and by fever, constituted a fact which we believe to be entirely without precedent, and 
compared with which the irruption of the northern races into southern Europe became 
mere summer's excursions ; but, perhaps the marvel of the event is surpassed this year. 
The impetus, or rather the combination of impelling causes, no longer exists. It might 
be supposed that so extensive a drain had exhausted the migratory elements of the 
nation. 

It might also be expected that the countries which last year could not receive the fugi- 
tive masses without much difficulty and complaint, would have offered vehement protests 
against an immediate renewal of the hungry invasion. It is, nevertheless, the fact that 
the migration of this year is nearly equal to that of the last. The grand total from all the 
British ports for the first eleven months of last year was 244,251 ; for the first eleven 
months of this year, 220,053. Nor do these figures represent the whole truth of the 
case. They are merely the numbers of those who embarked at ports where there are 
government emigration officers, and who have passed under official review. Some thou- 
sands of the better class of emigrants are not included in the census. There can, there- 
fore, be no doubt that in these two years more than half a million natives of these islands 
have fled to other shores. 

The annual migration, it appears, is now approaching the annual increase of our popu- 
lation, which is vulgarly magnified into a thousand a day, but in fact is not more than 
about 290,000 in the year. Now, it is not to be imagined for a moment that Great 
Britain, at all events, has reached the limit of its population. The capital, the stock and 
the " plant" of the island are continually increasing and have lately increased more ra 
pidly than ever. They also demand more and more hands for their further develop- 
ment. Under ordinary circumstances, therefore, we should be justified in dreading a 
migration which left the population stationary; and which, with a view to the growing 
trade and resources of the country, was rather a depopulation than anything else. At all 
events, the fact suggests that a spontaneous movement of so gigantic a character may well 
be left to itself, and requires no artificial stimulus. The matter certainly has come to 
that pass which makes caution the first duty of the state. 

It is from Ireland that we draw our rough labour. The Celt — and we are bound to 
give him credit for it — is the hewer of wood and drawer of water to the Saxon. Can 
we spare that growing mine of untaught but teachable toil "? The great works of this 
country depend on cheap labour. The movement now in progress bids fair to affect that 
condition of the national prosperity. The United States gain what 'we lose. 

Protection is a measure of necessary defence against a system that tends 
to lessen everywhere the value of labour, and if applied effectually, the* cor- 
rection will be speedy, and thenceforward trade may everywhere be free. 
To those who doubt this, I would recommend an examination of the effects 
that would now result from the abolition of the tariff, and the substitution of 
free trade for the present imperfect protection. They could not but see that 
it would close every mill and furnace in the Union, cutting off a demand for 
600,000 bales of cotton, and a supply of 700,000 tons of iron. Where 
then should we sell the one, or where buy the other? The labourer in fac- 
tories and furnaces would then grow food, but the market abroad for food is 



THE HARMONY OF INTERESTS. 



67 



now almost; closed* — or cotton, and the market for cotton is already ruined 
whenever the crop touches the point of two millions and a half of bales. 
Protection is right or wrong. Free trade is right or wrong. If protection 
is right, it should be complete and fixed, until no longer needed. If free 
trade is right, custom-houses should be abolished. Halfway measures are 
always wrong. 

The direct effect of the maintenance of the present system, that of 1846, 
is to cause renewed efforts on the part of England for engrossing the market 
of this country, whereas a return to that of 1842, were it made with the ap- 
probation and consent of all parts of the Union, won Id be followed by results 
that would compel a change of policy. The direct effect of a thorough and 
complete change in our system would be, that of teaching the whole people 
of England that if they "expect to be prosperous and happy, they must 
seek those blessings in the steady pursuit of a British policy — in cultivating 
domestic resources — in protecting domestic interests — in drawing closely 
the bonds of concord, strengthened by the ties of mutual dependence among 
themselves, and abandoning the shadowy and delusive expectation of find- 
ing compensation in foreign commerce for the destruction of the springs of 
domestic consumption." 

The harmony of all real interests among nations is perfect. The system 
of England is rotten and unsound — injurious to herself and to the world. 
It is the cause of pauperism and wretchedness at home and abroad, and the 
more effective the measures that may be adopted for the purpose of com- 
pelling its abandonment, the better will it be for her and for ourselves. The 
road to absolute freedom of trade lies through perfect protection. 

CHAPTER SIXTH. 

HOW PROTECTION AFFECTS COMMERCE. 

Commerce is an exchange of equivalents. The greater the number of 
commodities produced, the greater, other things being equal, will be the 
number of exchanges. Commerce tends, therefore, to grow with the in- 
crease of production. 

The machine of production is the earth. The instrument by aid of 
which it is made to produce is man. To induce man to labour, he must feel 
confident of obtaining an equivalent ; and the larger that equivalent, the stronger 
will be the inducement to exertion. The more advantageously his powers are 
applied, the larger will be the production, and the larger the equivalent of a 
given quantity of labour. 

One man raises grain and another sugar. Each desires to exchange with 
the other, giving labour for labour. 



* The present price of flour in England varies little from $5. What is likely soon to b€ 
the price of pork, may be judged of from the following, which I take from the papers of 
the day. 

A London letter, under date of Oct. 12, from a mercantile house extensively engaged in 
the trade, says: « We have the pleasure to hand you annexed our price current, in which 
you will see the comparative imports for the last three years ; the present year showing 
an excess of 25,000 packages of American bacon more than the last. The general ex- 
pectation with us is that prices must be very low the approaching season, from the in- 
crease of hogs in Ireland and Germany, and the very great production of hogs and aU 
kinds of meat in this country more than usual. We incline to the opinion that should 
the same quantity and quality of American come to this market the next, as during the 
past season, one-half of it will have to be sold for soap purposes. You will have heard 
that our government contract for pork was taken at 10' per cwt. less than last year, which 
we think is a pretty fair criterion of the market. 1 ' 



68 



THE HARMONY OF INTERESTS. 



The quantity of grain that must be given for sugar is dependent upon the 
quantity of both produced. If the season be favourable for the first, the 
crop will be large. If unfavourable for the second, the crop will be small. 
Much grain will then be given for little sugar, and vice versa, if the season 
be favourable for sugar and unfavourable for grain, much sugar will be 
given for little grain. In either case both parties suffer, and commerce is 
diminished. Each is therefore directly interested in doing whatever may 
be in his power to increase the returns to the labour of his neighbour, and 
thus increase the extent of commerce. 

To increase production is, then, to increase commerce. By ascertaining 
the circumstances which tend to limit the one, we shall ascertain those which 
tend to limit the other. To do so, it is needed only to call to our aid a few 
simple laws that may be found in any treatise of natural philosophy. 
They are these : — 

First. The greater the power, other circumstances being equal, the greater 
will be the effect. 

The producer of food labours every day and all day. The producer of 
sugar labours but three days in the week. The quantity of food produced 
is large and that of sugar small. The food-producer gives much food for 
little sugar — much labour for little labour. 

What is true of individuals is equally true of communities. If the com- 
munity of food-producers work every day, and that of sugar-producers but 
three days in the week, the whole of the first will be taxed because of the in- 
dolence of the last, and commerce will be diminished. If the whole community 
of food-producers work every day, and one half of that of iron-producers do 
not work — or if they apply their labour to other works than those of produc- 
tion — the quantity of iron produced will be small, and much food will be 
given for little iron. If the food-producing community could induce the 
workers in iron to labour every day and all day, there would be more iron to 
be given for food, commerce would be increased, and all would profit thereby. 
By what means could this be accomplished? To ascertain this, we must 
inquire the causes of their working so little. Doing so, we might find that 
among them there was a large proportion perfectly able to labour produc- 
tively, but unwilling so to do; that some of them employed themselves in 
carrying muskets, casting cannon, building forts and palaces, constructing 
ships of war and sailing in them ; and that others did nothing except so far 
as they were employed in devising modes of enabling them, out of the labour of 
others, to support themselves and those employed in the various operations to 
which I have referred; and that hosts of others were employed in carrying 
back and forth the products of the lands of others, and keeping accounts of 
what they did, and that thus one half of the community produced nothing, 
while consuming much. The other half we might find to consist of men who 
were sometimes willing to work but not able, having no work to do, and at others 
able but not willing, because of the small equivalent obtained, by reason of the 
necessity for contributing so large a portion of their earnings to the support of 
those who carried the muskets, built the ships and kept the accounts ; and the 
result might be, that we should find that, although the food-producers gave 
much, the iron-producers received little, the principal part being swallowed up 
by the intermediate men, who consumed much while producing nothing. It is 
obvious that if all worked, there would be three times as much iron produced, 
that commerce would be increased, and that the producer of food would ob- 
tain far more iron as the equivalent of far less food. The food-producing 
community is therefore contributing largely towards the support of those of 
the iron-producing one who are able to work and not willing to do so; 
and their condition will be improved if they can induce those who are able 



THE HARMONY OF INTERESTS. 



69 



and willing to work to come forth from among those who are neither able nor 
willing, leaving the latter class to produce food and iron for themselves. The 
amount of power to be applied will be increased, and the product will be 
greater, while there will be fewer among whom to divide it. The return to 
labour will be larger, and the power of accumulation will be increased. 

Second. The more directly power is applied, the greater is its effect. 

The producers of food and iron are distant from each other, and the labour 
required for effecting their exchanges is great. The one obtains his iron by 
the indirect process of raising food for distant men. The other obtains his 
food by that of making iron for distant men, and many horses and wagons 
ships and men, stand between them. The friction is great and production 
is small. The equivalents to be exchanged are few in number, and com- 
merce is limited. The equivalent of a day's labour in either food or iron is 
small. If the producer of iron could draw near to the producer of food, the 
number of horses and wagons, ships and men, standing between them, would 
be diminished, and the number of producers would be increased. The 
equivalents to be exchanged would increase in number, commerce would 
grow, and the equivalent of a day's labour would be greater. 

Third. The more steadily power is applied, the greater is its effect. At 
one moment the wind blows a gale, while at another there is a calm. The 
steam-engine works every day and all day, and although the amount of power 
applied is less, the voyage is made in shorter time. To secure the steady 
application of power, the air-chamber is provided, and the force produced by 
the action of the piston-rod is by its aid distributed over the whole period 
intervening between the strokes. 

The producer of food is often idle. At other times he is moderately em- 
ployed. In harvest times he is hurried, and he loses part of his crop for 
want of aid. If he could have the equivalent of an air-chamber, by aid of 
which his efforts could be divided over the year, the return obtained for his 
labours would be largely increased. 

The producer of iron may labour at all seasons, but a large portion of his 
work — the mining of coal and ore — may be done in advance, and when he 
has a stock on hand he can suspend his operations for a season. If the 
producer of food could induce him to come and labour in his vicinity,*he 
could at one period of the year help him to mine or transport ore and fuel, 
and the other could, at another period, aid him in gathering his crop. The 
first could then cultivate more land, and the equivalent of labour, in both 
food and iron, would be increased, and commerce would grow in extent with 
the increase of equivalents to be exchanged. 

Fourth. The more perfect the machinery the smaller will be the quantity 
required, the less will be the friction, and the greater will be the effect. The 
iron wheels of the engine encounter little friction in passing on the iron 
rail, and the force of a man's hand moves tons, where, if applied to a cart- 
wheel, it could not move a hundred. 

The producer of food obtains from the distant iron man small supplies 
of iron as the equivalent of large quantities of food. He is therefore obliged 
to use wood where he would desire to use iron. The friction is great, and 
labour is unproductive. The equivalent of a day's labour is small. If he 
could induce the iron man to come near him, the equivalent of labour would 
be largely increased, and he could use iron in place of wood. 

Fifth. The more enduring the machinery, the smaller will be the quantity 
of labour required for its reproduction, and the greater will be the quantity 
that may be given to the production of further machinery. The wooden post 
rots, and must be replaced. The iron one endures almost for ever. 

The producer of food, distant from the producer of iron, builds ships, and 







THE HARMONY OF INTERESTS. 



fences his land with wooden posts. Much of his time is occupied in repairing 
and renewing them. If he could induce the producer of iron to live near 
him, he would assist in building furnaces, and might then use iron posts ; 
and then labour that would otherwise be employed in renewing old, might 
be given to creating new machinery of other kinds, to aid in the work of 
production, and the equivalent of a day's labour would be increased. 

We see, thus, that the larger the quantity of labour, and the more directly 
and steadily it is applied, and the more perfect and enduring the machinery 
by which it is aided, the larger is the return to labour, and the greater the 
number of equivalents to be exchanged. 

Let us now suppose, first, that one community has it in its power to mo- 
nopolize the production of iron, and that of its members many spend all 
their time in idleness, while others are but occasionally employed — that many 
spend their time in carrying muskets on their shoulders, while very many 
are dissolute and drunken — and that the result is, that the quantity of iron 
produced is but one half or one-third of what it would otherwise be. Com- 
merce is but an exchange of equivalents, and the quantity of food that must 
be given for a ton of iron is double what it would otherwise be. It is obvious 
that the food-producing community is taxed for the support of the idle and 
worthless members of the iron-producing community. 

Second. That, in addition to all this, the iron-producing community is 
thus enabled to compel the food-producing community to be idle, when their 
labours are not needed on the farm, and to lose their crops for want of aid in 
harvest. It is obvious that here is a second tax imposed for the support of 
the non-workers among the producers of iron. 

Third. That the scarcity of iron compels the food-producing community 
to use wagons and common roads when they might have railroads, and to 
give to the work of transportation ten days' labour instead of one. Here, 
again, we have a tax imposed for the support of the non-workers among the 
producers of iron. The food-producers are compelled to transport their 
products to a distance, and deprived of the power to make roads by which 
to do it. 

Fourth. That the producers of food are compelled to employ more labour 
in building ships and wagons, and other perishable machinery, than would 
have been sufficient to build the furnaces and rolling mills, enduring- ma- 
chinery, required to give them all the iron they consumed. Here we have a 
fourth tax imposed for the support of the non-workers among the producers 
of iron. 

Each one of these operations tends to diminish the number of equivalents 
that may be exchanged, the number of exchanges made, and the equivalent 
of a day's labour, in food, iron, or other of the comforts or conveniences of 
life, and the result is, that the product of labour is scarcely one-fifth of what 
it would be, were all productively employed. 

These things premised, we may now examine the working of the colonial 
system. 

Colonists are men who work. Of those who remain behind, a large por- 
tion do not work. Some live in poor-houses, and others in palaces. Some 
dance and sing, and others carry muskets. Some build ships of war, and 
others sail in them. The producers are few. The non-producers are many ; 
yet they must eat, drink, wear clothing, and have houses, and these things must 
be provided for them by those who work. If all worked, the quantity of iron 
produced would be large, and those who produced food would get much 
iron in exchange. As few desire to work, and all must eat, the colonial 
system was invented for the purpose of compelling colonists to give much food 
land wool for little iron. The consequence has been everywhere the same. 



THE HARMONY OF INTERESTS. 



71 



While thus taxed for the maintenance of the money-spending classes, the 
colonists everywhere have been compelled to waste much labour, to work 
with poor machinery, and to give more of the products of labour for the use 
of that which is perishable than would have produced that which would 
endure almost for ever. Production is small. The equivalents to be ex- 
changed are diminishing in number. Commerce is perishing. 

The Irishman is compelled to waste much labour.* He works with poor 
machinery. He gives half the product of his labour for the use of wagons 
and ships. He eats his crop of potatoes, and goes in rags. He has nothing 
to exchange.! He flies to America, and the number of exchanges to be made 
in Ireland, and from Ireland, is thus diminished. 

The Hindoo flies from the valleys and plains to the hills, that he may escape 
from the system. Arrived at the hills, he rinds nodemand for his labour but in 
the cultivation of his little piece of land. He works with poor machinery, 
and his miserable product of fifty pounds of cotton to the acre is transported 
to Manchester, thence to be returned to him in the form of cloth, getting one 
pound for ten ; and thus giving nine-tenths of his labour for the use of ships 
and wagons, perishable machinery, when one-fifth would have done the 
work at home, could he have had permanent machinery. He flies again, 
or he dies of famine and pestilence, or he sells himself as a slave, to go to 
Demerara ; and thus is the number of the exchanges of India, and from 
India, diminished. 

Men are everywhere flying from British commerce, which every where pur- 
sues them. Having exhausted the people of the lower lands of India, it follows 
them as they retreat towards the fastnesses of the Himalaya. AfTghanistan 
is attempted, while Scinde and the Punjaub are subjugated. Siamese 
provinces are added to the empire of free trade, and war and desolation 
are carried into China, in order that the Chinese may be compelled to pay 
for the use of ships, instead of making looms. The Irishman flies to Canada; 
but there the system follows him, and he feels himself insecure until within 
this Union. The Englishman and the Scotchman try Southern Africa, and 
thence they fly to the more distant JNew Holland, Van Diemen's Land, or 
New Zealand. The farther they fly, the more they must use ships and 
other perishable machinery, the less steadily can their efforts be applied, the 
less must be the power of production, and the fewer must be the equivalents 
to be exchanged, and yet in the growth of ships, caused by such circum- 
stances, we are told to look for evidence of prosperous commerce ! 

The British system is built upon cheap labour, by which is meant low 



* In 1S42, three years before the potato rot, Ireland was thus described by an English 
traveller : " Throughout the south and west of Ireland, the traveller is haunted by the face 
of the popular starvation. It is not the exception— ^it is the condition of the people. In this 
fairest and richest of countries, men are suffering and starving by ?nillions. There are 
thousands of them, at this minute, stretched in the sunshine at their cabin doors with no 
work, scarcely any food, no hope seemingly. Strong countrymen are lying in bed, '/or the 
hunger' — because a man lying on his back does not need so much food as a person a-foot. 
Many of them have torn up the unripe potatoes from their little gardens, and to exist now 
must look to winter, when they shall have to suffer starvation and cold too.'" — Thackaray. 
Irish Sketch Book. 

■j- People with whom starvation is " the condition" of life, consume little of that clothing 
which England furnishes in exchange for so much labour. 

•■ Everywhere, throughout all parts, even in the best towns, and in Dublin itself, you will 
meet meu and boys — not dressed, not covered — but hung round with a collection of rags of 
unrivalled variety, squalidity, and filth — walking dunghills. * * * No one ever saw 
an English scarecrow with such rags." — Quarterly Review. 

Transferred to this country, everyone of these men would become a« large c nsumer oi 
food and cotton, and thus commerce would be increased. 



72 



THE HARMONY OF INTERESTS. 



priced and worthless labour.* Its effect is to cause it to become from day 
to day more low priced and worthless, and thus to destroy production upon 
which commerce must be based. The object of protection is to produce 
dear labour, that is, high-priced and valuable labour, and its effect is to cause 
it to increase in value from day to day, and to increase the equivalents to be 
exchanged, to the great increase of commerce. 

The object of what is now called free-trade is that of securing to the 
people of England the further existence of the monopoly of machinery, by 
aid of which Ireland and India have been ruined, and commerce prostrated. 
Protection seeks to break down this monopoly, and to cause the loom and 
the anvil to take their natural places by the side of the food and the cotton, 
that production may be increased, and that commerce may revive. How 
far it has tended here to produce that effect we may now examine. 

Prior to the passage of the tariff of 1828, our exchanges of iron amounted 
to only 25 pounds per head. By 1832 they had increased to 46 pounds 
per head. Commerce thus had grown. From 1834 to 1841, they averaged 
45 pounds per head. Commerce was stationary. In 1841 and '42, it fell to 
38 pounds. Commerce had fallen with what was called free-trade. From 
1844 to 1847, the equivalents of iron to be exchanged had increased to 97 
pounds per head. Commerce had grown with protection. They are now 73 
pounds per head. Commerce has fallen with the diminution of protection. 
If we turn now to coal, cotton, woollens, ships, or railroads, similar facts 
meet us everywhere. The number of exchanges grows with the system 
that looks to the elevation of the labourer. It diminishes with that which 
looks for its growth to the depression of the labourer. The interests of 
commerce are therefore in perfect harmony with those of manufactures and 
agriculture. 

The one system repels population. The other attracts it, and hence it 



* The poor silk weaver described in the following paragraph, which I take from the 
London Spectator, is the type of the system. He works so 'cheap' that he starves the poor 
Hindoo, and then starves himself. " His case would 'not be cured by protection." What he 
needs is the transfer of his labour from what is here called " production," but what is 
really only the conversion of the products of others, to that only thing which can be called 
production, and which consists in an increase of the quantity of commodities to be con- 
sumed. He merely changes their form from silk to silken cloth. Were his labours 
employed on any of the many millions of rich yet waste land within the kingdom, he 
would obtain more and better food, at less cost of labour. He could then feed better, and 
have more to offer in exchange. Commerce would then grow. 

" Nearer to us, in the outlying parts of the metropolis, the traveller of 'The Morning 
Chronicle' describes regions where the people are hopelessly contending with a system of 
industry that is fostered by commerce, because it yields ' profit,' and is peopled, because it 
sometimes yields subsistence— the mefins of keeping body and soul together, though not 
always that. We know that the describer does not exaggerate. Many and many a man 
toils, with others of his family, from dark before the dawn until far into the next night, as 
long as human endurance will last, and then the produce of their industry falls short of 
subsistence. You say, 'it is a decaying trade.' It is not a decaying trade : read 'The 
Morning Chronicle,' and see how the workman makes silk which, in spite of free trade, 
not only beats the Frenchman out of the market, it is so good and so 'cheap," but is fur- 
ther cheapened to bribe customers with reductions of prices filched from the wages of the 
miserable workman. Protection would not cure that man's case. Go round the district, 
stranger to you than Brussels, Lyons, or Genoa, and survey the dull, level aspect of poverty 
over all — poor workpeople, poor small tradesmen — a town of back streets. See the number 
of shops dealing in articles at second hand — not merely pawn-shops, but small clothes- 
dealers, traders in shop-marked stationery, dealers in apples that have seen better years 
in happier regions; the very grocery looks window-stained. Production, production, in 
a ceaseless round, but not enough subsistence for that sad nation j many things made and 
bold, and resold, but too few of them things to eat." 



THE HARMONY OF INTERESTS. 



73 



is that we see the whole people of Europe anxious to reach our shores. 
Abolish protection and immigration will cease, and commerce will diminish, 
for there wiil be less cloth and iron to be exchanged against labour. Make 
protection perfect and permanent, and immigration will increase rapidly, 
for there will be more cloth and iron to be exchanged against labour. 

Were Ireland this day free, she would establish protection and thus arrest 
emigration. Food, and cloth, and iron, would become more abundant, and 
commerce would grow. Were Canada independent, she would establish pro- 
tection, and then she would retain the immigrant coming from Ireland or Eng- 
land. Were India independent, she too would establish protection, and then 
the culture of cotton would be resumed on the rich lands of Bengal. In all 
these cases production would be increased, and the power to maintain 
commerce would grow. The people of the United States are the best cus- 
tomers to the people of England, because they are in some degree pro- 
tected against the exhaustion consequent upon the existence of their sys- 
tem. Ireland cannot buy, and she is reduced to beg. Were she independent 
she would make iron, and then she could buy fine cloths, silks, books and 
pictures. The well-understood interests of all nations are in perfect har- 
mony with each other. 

The object of free trade is proclaimed to be the increase of commerce, 
but commerce withers under it. Ireland now consumes a pound of cotton 
per head. Transfer an Irishman here, and he will consume a dozen pounds, 
and 700,000 of her people would make more trade between the producers and 
• consumers of cotton than is now maintained with the whole eight millions 
of Ireland. Were she free, she would adopt protection, and trade would 
grow, for she would then need six pounds per head. The commerce of the 
Zollverein has grown with protection. The people of Germany now con- 
sume two pounds of cotton where before they consumed but one. The com- 
merce of India diminishes with every approach to what is called free trade. 
The producers of cotton on the lower lands of Bengal could have, as the 
equivalent of a day's labour, quadruple the iron that can be obtained now 
that the cultivator of that commodity has been driven to seek the high and 
poor lands. 

The free trader, so called, says to the farmer, "You can have English iron 
in New York for thirty bushels of wheat, but you must hand over to the 
Treasury ten bushels for permission to make the exchange. If you take a 
ton of American iron, you must give to the producer of it forty bushels, 
and thus are you taxed ten bushels for the support of the iron man." 
Abolish protection and we shall have more food to sell abroad and more iron 
to buy abroad, and will need more wagons and ships, and it will then take 
sixty bushels of wheat — perhaps even one hundred — to pay for a ton of iron. 
The quantity to be exchanged will then fall to 20 pounds per head, and 
commerce will be diminished. 

The farmer has his choice between giving thirty bushels for the support of 
the people who dance and sing and live in palaces, and that of those who 
carry muskets, or ten for the maintenance of the government under which 
he lives. The more he gives to the first, the more and the longer he must 
continue to give, the poorer he must grow, and the less will be the 
power to maintain commerce. That such is the case will be obvious 
from an examination of facts given in the last chapter. In the years 
from 1827 to 1834, 275,000,000 pounds of cotton would have purchased 
1,250,000 tons of iron. In 1845-6, 600,000,000 were required to pay for 
1,200,000 tons. What became of the difference 1 Were the English miners 
better clothed? On the contrary, it was but little before that time that it 



74 



THE HARMONY OF INTERESTS. 



was made known to the world that males and females worked together in 
the mines, absolutely naked. Was the condition of the people better ? On 
the contrary, Ireland was fast becoming a great poor-house, and the poor- 
rates of England were fast advancing to the point they have now attained, 
that of £8,000,000 per annum. What then went with the difference ? The 
question may be answered by pointing to the vast increase of public expen- 
diture in the last fifteen years, during which the number of men who carry 
muskets and build ships of war has been so largely increased ; to the innum- 
erable and expensive commissions for ascertaining the causes of distress and 
pauperism ; to the great fortunes of bankers and successful speculators ; 
to men like Hudson, the rail-road king; to the large number who have 
in the late railroad speculation realized immense fortunes, as engineers, 
solicitors, counsellors and parliamentary agents, and to the host of others 
who fatten on the people. The productive power is diminishing, and the 
few become greater as the many become less. With every step in the 
progress of the latter, the power to maintain commerce diminishes, for the 
people become poorer, and the power to produce commodities to be given in 
exchange becomes more and more limited. 

Whatever the occurrence that tends to diminish production, whether wars 
or revolutions, the increase of armies and fleets without the actual occurrence 
of war, or the increase of inequality, the few becoming richer and the many 
poorer, the effect is to impose a tax upon the consumers of the commodity 
the production of which is thus restrained. Under a system of real freedom 
of trade the chief portion of this tax would be paid by the actors themselves, I 
for the immediate effect of such occurrences would be that of stimulating 
other nations to increased exertions to fill the vacuum that had been created. 
Under the system which gives to one nation a monopoly of the machinery 
for converting the products of other nations, a large portion of the tax may 
be, and is thrown upon them, and thus are they made to contribute largely 
towards the maintenance of all that class, poor and rich, who prefer to live 
by the labour of others. 

We have seen that the quantity of cotton consumed in 1845 and '46 
averaged 596,000,000 pounds, that the price of gray cloth was 6s. 7d., and 
that 34,700,000 pieces delivered in Liverpool would have been required to 
pay for the cotton also delivered in Liverpool — all freights, charges, &c, 
being thus left for the planter to pay. 

The average work of operatives in this country would be the conversion of 
4000 pounds of cotton into cloth of this description. In England, we may 
set it down at 3000, and this would require 200,000 to convert the whole 
quantify. Allowing them to average even £30 each,* the wages would 
amount to £6,000,000, and the product would be 92,000,000 of pieces, 
35,000,000 of which would pay for the cotton, leaving 57,000,000 

Worth £19,000,000 

From which deduct the labour performed, say, 6,000,000t 

And there remain for interest, profits, &c, . £13,000,000 
In order that large profits be realized, it is necessary that the price of the 
raw material be kept low; a state of things which results necessarily from 
the quantity requiring to be converted bearing a large proportion to the ma- 
chinery prepared for its conversion. The mode of accomplishing this is 
simple. The first indication of a tendency to rise in the price is met by 

* The result of careful inquiry, in 1833, gave 10s. 5d. as the average of operatives, 
male and female, mechanics, engineers, &c. This would be £27, Is. Sd. for the year. 
■f This is 2|d. per pound, which is much more than the truth. 



THE HARMONY OF INTERESTS. 



75 



working short hours, the effect of which is to diminish the wages of labour to 
a point so near the cost of food and rent, and taxes on both, that the power of 
purchasing clothing is almost destroyed; and therefore it is that we see such 
prodigious changes in home consumption whenever a small rise of prices 
takes place. The stock begins to accumulate, and with its accumulation 
the price falls. Mills again run full time, and so they continue until another 
rise takes place, when the same operation is performed, as is at this moment 
being the case. 

The exchanger, owner of machinery, thus stands between the labourer 
who produces, and the labourer who consumes the cotton, fixing the price 
for both, and taking for himself the largest share; and thus it is that men 
accumulate colossal fortunes, while surrounded by men, women, and children 
living in poverty and clothed in rags.* Of the burden thus thrown upon 

* Rothschild may be taken as the type of the whole system, and the following notice 
of him and of his modes of taxing those by whom he was surrounded, furnishes a pic- 
ture of the speculators of every kind, in England, who live at the cost of the labourers of 
the world : — 

"The name of Nathan Meyer Rothschild was in the mouths of all city men as a pro- 
digy of success. Cautiously, however, did the capitalist proceed, until he had made a 
fortune as great as his future reputation. He revived all the arts of an older period. He em- 
ployed brokers to depress or raise the market for his benefit, and is said in one day to 
have purchased to the extent of four millions. The name of Rothschild as contractor for 
an English loan made its first public appearance in 1819. But the twelve millions for 
which he then became responsible went to a discount. It was said, however, that Mr. 
Rothschild had relieved himself from all liability before the calamity could reach him. 
From this year his transactions pervaded the entire globe. The Old and the New World 
alike bore witness to his skill ; and with the profits of a single loan he purchased an es- 
tate which cost £150.000. Minor capitalists, like parasitical plants, -clung to him, and 
were always ready to advance their money in speculations at his bidding. Nothing 
seemed too gigantic for his grasp; nothing too minute for his notice. His mind was as 
capable of calculating a loan for millions as of calculating the lowest possible amount on 
which a clerk could exist. Like too many great merchants, whose profits were counted by 
thousands, he paid his assistants the smallest amount for which he could procure them. He be- 
came the high-priest of the temple of Janus, and the coupons raised by the capitalist for 
a despotic state were more than a match for the cannon of the revolutionist. 

"From most of the speculations of 1824 and 1825, Mr. Rothschild kept wisely aloof. 
The Alliance Life and Fire Assurance Company, which owes its origin to this period, was, 
however, produced under his auspices, and its great success is a proof of his forethought. 
None of the loans with which he was connected were ever repudiated ; and when the 
crash of that sad period came, the great Hebrew looked coldly and calmly on, and con- 
gratulated himself on his caution. At his counting-house, a fair price might be procured 
for any amount of stock, which, at a critical time, would have depressed the public market; 
and it was no uncommon circumstance for brokers to apply at the office of Mr. Rothschild, 
instead of going in the Stock Exchange. He has, however, been occasionally surpassed 

cunning ; and on one occasion a great banker lent Rothschild a million and a half on 
V->e security of consols, the price of which was then 84. The terms on which the money 
"vas lent were simple. If the price reached 74, the banker might claim the stock at 70; 
twit Rothschild felt satisfied that, with so large a sum out of the market, the bargain was 
olerably safe. The banker, however, as much a Jew as Rothschild, had a plan of his 
' wn. He immediately began selling the consols received from the latter, together with a 
similar amount in his own possession. The funds dropped; the Stock Exchange grew 
alarmed; other circumstances tended to depress it; the fatal price of 74 was reached; 
and the Christian banker had the satisfaction of outwitting the Hebrew loanmonger. 
But, if sometimes outwitted himself, there is little doubt he made others pay for it; 
and, on one occasion, it is reported that his finesse proved too great for the authorities of 
the Bank of England. Mr. Rothschild was in want of bullion, and went to the governor 
to procure on lo»m a portion of the superfluous store. His wishes were met; the terms 
were agreed on; the period was named for its return; and the affair finished for the 
time. The gold was used by the financier; his end was answered, and the day arrived 
on which he was to return the borrowed metal. Punctual to the time appointed, Mr. 
Rothschild entered; and those who remember his personal appearance may imagine tht 



THE HARMONY OF INTERESTS. 



the planter much goes to the payment of taxes for the maintenance of those 
who are reduced by the system to a state of pauperism — much to the govern- 
ment, which taxes every note, bill or bond — servants, horses, carriages, 
&c. &c. Vast sums go to the maintenance of lawyers and conveyancers, to 
that of stock-gamblers and speculators, and much is lost by failures of every 
kind, the natural results of a gambling trade. The result is, that the 
cotton which yields the planter, on his plantation, but five cents per 
pound, and is sold in Liverpool at four-pence halfpenny per pound, 
is sold by the mill owner at a shilling,* and yet the reward of the la- 
bour employed in converting it into cloth is not two-pence, and probably 
little more than a penny per pound. It is so obviously the interest of mill 
owners to obtain large allowances for the use of machinery, that it cannot be 
doubted they will continue to pursue this course, and to make every effort 
that may be necessary to continue to themselves the control of the cotton 
market. That control depends upon continuing the monopoly of machinery ; 
and the moment that monopoly shall be broken up, and machinery shall 
become so abundant elsewhere as to relieve the planter from the necessity 
for seeking a market, the power of taxation will pass away, cloth will be 
cheap, consumption will be trebled, and the producer will grow rich. 

We may now, for a moment, look to the manner in which the sugar-planter 
is taxed. The quantity of sugar entered for home consumption in 1847 was 
5,800,000 cwt., and the average price was about 25s. per cwt., of which 
at least one-fourth, and very probably one-third, went to pay the cost of trans- 
portation in and from India, the Isle of France, Brazil, Cuba, Jamaica, &c, 
storage, commission, &c. 

Allowing it to have been three-tenths, the planter had at his command 
about £5,000,000 

The price of iron was £9, 12s. and if we now add to this for 
the transportation to Cuba, Brazil, India, &c, and from the 
port to the plantation, only £1, 8s. we have £11 as the cost 
of a ton, at which rate 450,000 tons would amount to £4,950,000 
and if the account were more accurately made up, it would not probably 
amount to 400,000 tons. 

To add that quantity in a single year to the product of iron in this country, 
would not require the slightest exertion, and yet we see here that in return 
for it, small as it was, England obtained, in 1847, more than one-fourth of 
the products of the labour of all the sugar-producing countries of the globe ! 
A very slight examination of this statement will show in what manner the 
people of the world are taxed for the maintenance of iron-manufacturers, 
railroad speculators, and the host of middle-men, with whom England so 
much abounds. Her producers are few, and her consumers are many, and 
the materials for their consumption are obtained by means of a system of 
taxation the most extraordinary that the w r orld has yet seen. 

The object of protection is not only to rescue ourselves from the necessity 
of contributing to the maintenance of such a system, but also to facilitate 
the process of emigration from lands so taxed, adding to the value of the 
people who remain, by diminishing the supply of men in market, and com- 

cunning twinkle of his small, quick eye, as, ushered into the presence of the governor, he 
handed the borrowed amount in bank notes. He was reminded of his agreement, ana 
the necessity of bullion was urged. His reply was worthy of a commercial Talleyrand. 
' Very well, gentlemen. Give me the notes. I dare say your cashier will honour them 
with gold from your vaults, and then I can return you bullion.' To such a speech, the 
only worthy reply was a scornful silence." 

* The pieSe which sold at 6s. Id. required to produce it about pounds of cotton 
The price was thus almost exactly a shilling per pound. 



THE HARMONY OF INTERESTS. 



77 



pelling those who desire to purchase labour to give for it the proper equiva- 
lent in food and raiment, which now they do not. With every step in that 
direction, their power to produce wron and to consume food and clothing 
must grow, and the power to maintain commerce must increase. 

We have seen that iron was much more costly in 1845-6 than from 
1827 to '34. In opposition to this unquestionable fact, the late Secretary of 
the Treasury asserted that, "experience proves that from improved ma- 
chinery, new inventions and reduced cost of production, the foreign articles 
are constantly diminishing in price."* In opposition to this we have the 
fact that not only was iron higher but cotton was lower. The man 
who gave two pounds of cotton in 1845-6 for less iron than he could 
have had in 1833-4 for one, found that the price of iron was increasing 
and not diminishing, and that it was far more difficult than in the former 
period to obtain what he needed for the construction of machinery. His 
wages in iron were thus reduced, and his power to accumulate capital was 
reduced ; whereas, if he had made his exchanges on the spot with the pro- 
ducer of iron, both would have grown. Nevertheless we are told by the same 
authority that the necessary consequence of the protective system is, that 
" wages throughout the country became lower than before, because the 
aggregate profits of the capital of the nation engaged in all its industry is 
diminished. "t It is deemed most profitable to trade with those nations 
whose labour is low, and the lower it is "the greater is our gain in the ex- 
change." The labour of Great Britain is lower than it was fifteen years 
since, because it is less productive, and the less her people produce, the less 
they have to give us in exchange for our products; the consequence of which 
is, that we give more cotton for less iron. If all the people of England were 
to work, they would produce far more cloth and iron; wages would then 
rise, and the equivalent of a bale of cotton in iron would be doubled. The 
more productively the people of the world are employed, the greater will be 
the value of their labour, and the larger will be the quantity of good things 
that we shall obtain in exchange for our labour. The larger their armies, 
the more destructive their wars, the more numerous their revolutions, the 
more their money-spending classes, paupers and noblemen, abound, the smaller 
will be the value of labour abroad, the smaller will be their power to main- 
tain commerce, and the ^mailer will be the advantage to those who trade 
with them ; for the less silk or iron they produce, the more food or cotton 
must be given them as the equivalent of similar quantities. 

The document to which I have above referred belongs to the school of 
discords ; that which teaches to buy in the cheapest and sell in the dearest 
market, and sees great advantage to be gained by reducing the cotton of 
the poor Hindoo to a penny a pound, careless of the fact that famine and 
pestilence follow in the train of such a system. The policy that produces 
a necessity for depending on trade with people who are poorer than our- 
selves tends to reduce the wages of our labour to a level with theirs, and to 
diminish commerce. That which should give us power to trade with na- 
tions who might be richer than ourselves would tend to raise our wages to 
a level with theirs. By bringing the Irishman here, and enabling him to 
make his exchanges with us, we raise him to our level as a producer. By 
exporting our people to Ireland, and compelling them to make their exchanges 
there, we should sink their wages to a level with those of that country. 
The policy that brings people here and raises them in the scale of civiliza- 
tion, is that which promotes commerce. That which causes them to return 
home, and thus arrests the tide of immigration, preventing advance in 
civilization, is the one which diminishes commerce. 



• Report, December, 1848. 



J Ibid. 



78 



THE HARMONY OF INTERESTS. 



CHAPTER SEVENTH. 

HOW PROTECTION AFFECTS THE QUANTITY AND QUALITY OF THE MACHINERY 

OF PRODUCTION. 

The object sought to be accomplished is the improvement of the condition 
of man. The mode by which it is to be accomplished is that of increasing 
his productive power. The more food a man can raise, the more and better 
food may he consume, and the larger will be the surplus that can be appro- 
priated to the purchase of clothing, to the education of his family, to the en- 
largement of his house, or to the improvement of his machinery, and the 
greater will be the amount of leisure that can be appropriated to the im- 
provement of his modes of thought. 

The better his machinery, and the more readily it can be obtained, the 
larger will be his production. Machinery consists chiefly of iron, and the 
more readily that can be obtained, the more rapid will be the increase of 
production and the improvement of the physical, moral, intellectual and 
political capacities of man. It is the great instrument of civilization. 

The more durable his work, the more rapidly will his capital increase. 
Where iron is abundant it is substituted for wood in the building of houses, 
which are thus secured from fire, and in the construction of ships and roads, by 
which transportation is improved — and with each such step his powers of 
production are increased. 

That he may obtain iron readily, he must have the command of fuel, ob- 
tainable at moderate cost of labour — in other words, cheaply — for things are 
cheap or dear not in proportion to their money-price, but to the quantity of 
labour required for obtaining 'them. The money-price of grain, in Ireland, 
is less than in England, yet the cost in labour is so great that the poor cul- 
tivator eats still poorer potatoes. The money-price of coal is less than it 
was two years since, yet the consumption has diminished, because the 
labour-price has risen. The money-price of cotton in those parts of India 
in which it is raised, is about two cents per pound, yet the man who raises 
it covers his loins with a rag, dispensing with clothing for the rest of his 
body, because the labour-price of cloth is great. Where production is 
small, the labour-price of commodities is high, fend consumption is very 
small ; and vice versa, where production is large, the labour-price of com 
modities is low, and consumption is great. 

Large production requires good and cheap machinery, and that we may 
obtain such machinery, we must have good and cheap fuel. Abundance 
of fuel and iron are the foundation upon which civilization must rest, and 
whatever the course of policy that tends most to facilitate their acquisition, 
that is the one which must tend most rapidly to augment the productive power 
of man, and to increase his power and his capacity for improvement. 

Iron ore and fuel exist throughout this country in such profusion as is 
elsewhere unknown. Nowhere in the world can they be so readily ob- 
tained — nowhere so easily brought into combination with each other. The 
anthracite of Pennsylvania is the best fuel in the world, and it can be mined 
as cheaply as any other. It is interstratified with iron ore in great abun- 
dance. Limestone abounds close to the great Schuylkill region, and 
it may be obtained with as little labour as anywhere in the world. The 
ores and fuel of Ohio and the West are thus described : — 

The beds of ore are easy of access, being and associated with materials necessary for its re- 
duction, cannot fail to be of immense sources of wealth. Most of the working-beds of 
ore are above the first workable bed of coal. The amount of workable ore in Muskingum 
county is estimated at 153,000,000 cubic yards, which, when melted, will yield about 



THE HARMONY OF INTERESTS. 



79 



half that number of tons, in pigs. We need not now speak of localities. Mr. Briggs 
closes his report on iron ore as follows : — "A very low calculation of the amount of good 
iron ore in the region which has this season been explored, is equal to a solid, unbroken 
stratum, sixty miles in length, sixty miles in width, and three feet in thickness. A square 
mile of this layer, being equivalent in round numbers to three millions cubic yards, when 
melted, will yield as many tons of pig iron. This number, multiplied by the number of 
square miles in the stratum, will give 1,080,000.000 tons; which, from three counties 
alone, will yield annually, for 2700 years, 400,000 tons of iron — more than equai to the 
greatest amount made in England previous to the year 1829.'' — Ohio Paper. 

The country bordering on Carp River (Lake Superior) is, perhaps, the richest on the 
globe for its iron ore. The ; ' Jackson Iron Company," whose location we had the 
pleasure of visiting, is situated some twelve miles from the Lake Shore, and about three 
miles from the iron mountains. One of these mountains belongs to the above-named 
company, and the other to the " Cleveland Iron Company.'' These two mountains, as we 
were informed, are by far the richest and most valuable of any iron deposit that have 
been discovered — though it is said that more or less iron ore is found spread over some 
seventeen or eighteen townships between Lake Superior and Green Bay. This ore con- 
tains from 75 to 00 per cent, of pure iron, and metal made from it by the Jackson Com- 
pany has been submitted to the severest tests, and proves to be of the very best quality 
of iron that is made in any part of the world, having been drawn down to the size of 
No. 36 wire. The Jackson Iron Company (under the superintendence of P. M. Everett, 
Esq., who we now understand leaves, and is succeeded by Czar Jones, Esq., of Jackson) 
has been making iron for some twelve or eighteen months. — Lake Superior News. 

Such being the case, we might suppose that the consumption of fuel and 
iron would be great, but such has not been the case. 

In 1810, the domestic manufacture amounted to only 50,000 tons. In 
1828, it had reached 100,000. In 1818, '19, '20, it 'may perhaps have 
reached 70,000, but even that is very doubtful. The total importation of bar 
and pig iron in those years was 40,000 tons, or 13,333 per annum. The 
import of manufactured articles of iron may have been hfllf as much, and 
this would give a consumption of 90,000 tons, or 200,000,000 of pounds for 
a population of 9,400,000 persons, beinga little over 20 pounds per head. The 
average consumption of the Union for all purposes, for house-building and 
ship-building, for agricultural implements, and for machinery of every de- 
scription, was equal, therefore, to little more than twice the weight of 
an axe per head per annum, and yet there existed, as there now exists, a 
capacity to produce iron at Jess cost of labour than anywhere in the world. 
If we desire now to understand the cause of this, it may be found in the fact 
that up to the Revolution, the manufacture of iron, even that of horse-shoe 
nails, was prohibited, and there existed no inducement to erect works for the 
smelting of the ore, when the pig could not be used. The consequence was, 
that it did not grow with its natural growth, while that of England was 
forced forward, and when the day of nominal independence arrived, that of 
real independence was still far distant. Under the various tariffs from 1789 
to 1812, the duties were ad- valorem, commencing with 7§ per cent, and 
gradually rising until they had attained, before the war of 1812, 17£ per 
cent. The production of iron had made no progress, and the whole supply 
had to be sought abroad, the consequence of which was that it was scarce 
and dear. Embargo, non-intercourse, and war raised the price so high that 
furnaces were built in considerable numbers ; but with the peace, the duties 
on manufactured iron were reduced to 20 per cent. The demand for pig 
iron was thus diminished, and the price in Pittsburgh, which had been $60, 
fell in 1820 and 1821 to $20, the consequence of which was the ruin of 
nearly all engaged in its production. This, however, was not a consequence 
of reduction of duty. At that very time the duty on pigs was $10, and on 
bars $30 per ton, and thus the selling price at that place was far less than 
the freight and duty on imported iron. Iron was nominally cheap, but 



80 



THE HARMONY OF INTERESTS. 



really dear: so dear that consumption was destroyed. Labour was at 86 
per month, and wheat sold for 25 cents a bushel, and thus was produced so 
total an inability to consume this most necessary of all commodities, that al- 
though the furnaces were closed, the whole import of pig and rolled iron in 
1821, was but 4000 tons, or one ton to every 2,500 persons. It may be 
doubted if the consumption of that year exceeded six pounds per head. 
We see thus that the power to import disappeared with the power to pro- 
duce, as has already been shown to have been the case on other occasions. 

Who, now, were the losers by the greatly increased difficulty of obtaining 
this great instrument of civilization ? To answer this question, we must 
first inquire who are the great consumers of iron? The farmers and planters 
constitute three-fourths of the population of the nation, and if the loss were 
equally distributed, that portion of the loss would fall up.on them ; but we 
shall find upon inquiry that it is upon them, the producers of all we con- 
sume, that the whole of it must fall. 

The farmer needs iron for his spades and ploughs, his shovels and his 
dung-forks, his trace-chains and horse-shoes, and his wagon-wheels; for his 
house, his barn, and his stable. He needs them, too, for his timber. If 
iron be abundant, saws are readily obtained, and the saw-miller takes his 
place by his side, and he has his timber converted into plank at the cost of less 
labour than was before required to haul the logs to the distant saw-mill. He 
obtains the use of mill-saws cheap. If iron be abundant, the grist-mill 
comes to his neighbourhood, and now he has his grain converted into flour, 
giving for the work less grain than was before consumed by the horses and 
men employed in carrying it to the distant mill. If iron be abundant, 
spades and picks are readily obtained, and the roads are mended, and he 
passes more readily to the distant market. If iron increase in abundance, 
the railroad enables him to pass with increased facility, himself, his turnips 
and potatoes, to markets from which before he was entirely shut out by cost 
of transportation, except as regarded articles of small bulk and much value — 
wheat and cotton. If iron be abundant, the woollen-mill comes, and his 
wool is converted on the spot by men who eat on the ground his cabbages 
and his veal, and drink his milk, and perform the work of conversion in re- 
turn for services and things that would have been lost had they not been thus 
consumed. At each step he gets the use of iron cheaper — that is, at less 
cost of labour. If iron be abundant, the cotton-mill now comes, and the 
iron road now brings the cotton, and his sons and his daughters obtain the 
use of iron spindles and iron looms by which they are enabled to clothe 
themselves at one-twentieth of the cost of labour that had been necessary 
but twenty years before. Instead of a yard of cotton received in return for 
two bushels of corn, one bushel of corn pays for six yards of cloth — and now 
it is that the farmer grows rich. 

A careful examination of society will satisfy the inquirer that all the 
people engaged in the work of transportation, conversion, and exchange, 
are but the agents of the producers, and live out of the commodities they 
produce, and that the producers grow rich or remain poor precisely as they 
are required to employ less or more persons in the making of their ex- 
changes. The former who is compelled to resort to the distant mill em- 
ploys many persons, horses and wagons, in the work of converting his grain 
into flour, and his land is of small value. Bring the mill close to him, and 
a single horse and cart, occasionally employed, will do the work. The 
farmer who employs the people of England to produce his iron, is obliged 
to have the services of numerous persons, of ships and wagons, and horses, to 
aid in the work. Bring the furnace to his side, and let his neighbour get out 
his iron, and he and his sons do much of the work themselves, furnishing 



THE HARMONY OF INTERESTS. 



81 



timber, ore, and the use of horses, wagons, &c, when not needed on the 
farm. 

The man of Tennessee sends to market 300 bushels of corn, for which 
ho receives in return one ton of iron, the money-cost of which is $60, but 
the labour-cost of which is the cultivation nf ten acres of land. If he 
could follow his corn, he would find that the men who get out his iron 
receive but 30 or 40 bushels, and that the remaining 260 or 270 are swal- 
lowed up by the numerous transporters and exchangers that stand between 
himself and the men whom he thus employs. If, now, he could bring 
those men to his side, giving them double wages, say sixty bushels of corn, 
he would be a gainer to the extent of 240 bushels. While he has to give 
300 bushels, his iron is dear, and he can use little. When he obtains it for 
60 bushels it is cheap, and he uses much. His production increases, and 
his ability to use iron increases with it, and the demand for workers in iron 
increases, and all obtain food more readily, the consequence of which is that 
they have more to spare for clothing, and for other of the comforts or the 
luxuries of life. 

Whenever there is in market a surplus of any commodity, the whole 
quantity tends to fall to the level of the lowest price required to enable the 
holders to find purchasers, and so long as we shall continue to have a sur- 
plus of food for export, the price of the whole must continue to be regulated 
by that which can be obtained for the trivial quantity sent to Liverpool. 

Whenever it is necessary to resort to distant places to procure a part of 
the supply of any commodity, the price of the whole is regulated by the 
cost of obtaining this last small portion. In 1847, we produced 800,000 
tons of iron, yet the demand was so much in advance of the supply that we 
were obliged to import a small quantity, and the price at which that was 
obtained fixed the price of the whole. The farmer is thus always selling 
in the cheapest and buying in the dearest market. The labour and capital 
required to produce a ton of iron, are not as great as are needed for the pro- 
duction of forty bushels of corn, and yet he gives for it three hundred, be- 
cause of the quantity of labour wasted in transporting the one to the man who 
produces the other. 

The prices of labour and iron are both higher than in Europe, and there- 
fore we import both. The price of food is lower than in Europe, and there- 
fore we export it. Whenever the import of labour shall be such as to do 
away with the necessity for exporting food, as food, its price will be high, 
and we shall cease to export it. Whenever the import of men shall be such 
as to do away with the necessity for importing iron, the price will be low, 
and we shall export food in the form of iron. By the same operation the 
farmer will thus be enabled to obtain high prices for his grain, and to buy 
his iron cheap. He will then buy in the cheapest and sell in the dearest 
market, and the value of his labour will be increased. 

We have seen that in the period that elapsed between 1821 and 1829, em- 
bracing the six years which followed the passage of the act of 1824, the con- 
sumption of iron rose to about 25 pounds per head. In the three following 
years, under the tariff of 1828, it rose to 47. By the Compromise Act, the 
duty on railroad iron was abolished, and the consequence was, that the power 
of consumption diminished, remaining at an average of but 46 pounds for the 
next nine years. Under the strictly revenue clauses of the tariff it fell 
to 38 pounds, being less than the consumption of eleven years before. By 
1846, it had risen to 94, and in the following year it rose to 98. Who were the 
persons that benefited by this change ? Let us see. The abundance of iron 
facilitated the opening of coal mines by means of steam-engines and other 
machinery, and the making of roads, by means of which coal, and food, 

11 



2 



THE HARMONY OF INTERESTS. 



and timber could be taken to market; and thus greatly diminished the number 
of persons intermediate between the producer and consumer ; and the abund 
ance of fuel and iron facilitated the construction of steamboats, diminish- 
ing greatly the cost of transportation to and from market ; and facilitated 
the construction of mills and furnaces, at which the farmers and planters could 
make their own exchanges ; while the increased facility of obtaining ploughs 
and harrows, spades and axes, tended to increase the productiveness of labour, 
with large increase in the quantities to be exchanged, and in this manner 
the whole benefit resulting from the augmented facility of obtaining iron went 
to the cultivators of the land, farmers and planters. 

But why should protection have been necessary to produce this result'? 
To the general reasons already given, may now be added, those which refer 
particularly to iron. In a table now before me,* the English prices of mer- 
chant-bar iron are thus given : — 



£ 

1816— 11 

1817— 8 

1818— 12 

1819— 11 

1820— 10 

1821— 9 

1822— 8 

1824— 13 

1825— 15 

1826— 11 



s. £ 
0@ 8 
10 @ 13 
@ 10 



10 
10@ 
10 @ 
10 @ 

@ 
0@ 



s. 




£ 


s. 


£ 


s. 


15 


1827— 


9 


10® 


8 


15 





1828— 


9 


@ 


7 


15 





1829— 


7 


10 @ 


6 


12 





1830— 


(5 


15 @ 


6 


5 


10 


1831— 


6 


5 @ 


5 


17 


15 


1832— 


6 


5@ 


5 


10 





1833— 


6 


15 @ 


7 


15 


15 


1834— 





10 @ 


7 


12 


10 


1835— 


8 


5 @ 


6 


5 


10 


1836— 


11 


10 @ 


10 


5 



<£ s. 

1837— 10 5 

1838— 9 10 

1839— 10 5 

1840— 9 

1841— 7 15 

1842— 6 10 

1843— 5 

1844— 6 6 

1845— 6 10 

1846— 9 




We have here £4 10=$21 60, and <£15=$72, and every price between. 
Why should these enormous variations take place ? It costs no more labour 
to make iron at one time than at another. The man who mined a ton of ore 
or coal in 1832, when the price was £5 10, could mine more than a ton in 
1846, because machinery had been greatly improved, and yet the price was 
then £9. 

The season may be adverse for the growth of grain or cotton, and the roi 
may destro)'- the potato crop, thus diminishing the quantity to be supplied 
with great increase of price, and yet neither food nor cotton is liable to the 
enormous and sudden changes that we see in regard to iron, which ought to 
be perfectly steady. These changes are due to the unsound character of the 
system, and the perpetual changes that result therefrom. The consequence 
of them is, the constant recurrence of ruin to all, in other countries engaged 
in the manufacture of iron. In 1816 it was high, and furnaces were built. In 
1821, it was low, and iron-masters were everywhere ruined. In 1825 it 
was high, and furnaces were again put in blast. In 1831, furnace-masters 
were again ruined. In 1836 it was high, and in 1842, it was low, and on 
both occasions the same operations were repeated. So again in 1846, furnaces 
were built, and now, in 1849, they are being closed. 

The consequence of this is that the iron manufacture throughout the 
country is in a barbarous condition. Small furnaces abound, at which much 
labour is given to producing little iron. At each forced intermission of the 
exertions of England to maintain the monopoly of the production of this im- 
portant commodity, we can see it making its w r ay gradually to the land 
where alone it can be produced at small cost of labour — that land where ore, 
coal and limestone are interstratified with each other, and at which it would 
long since have arrived but for our frequent changes of policy. 



• Merchants' Magazine, Vol. XX. p. 337. 



THE HARMONY OF INTERESTS. 



83 



Very little examination is necessary to satisfy the inquirer that it has been 
precisely when iron has been lowest in England, in 1822 and 1843, that 
our consumption was least; and it is now diminishing rapidly, as our furnaces 
are being closed and their owners ruined. The power to consume declines 
daily. With another year or two the price abroad will be high, but time 
will then be required to get the old furnaces into operation, and still 
longer to build new ones; for iron-making is like buying lottery tickets, 
and the blanks are more numerous than the prizes. That time arrived, 
pig iron may be again $40 and bars $80 per ton. 

So long as a nation is dependent on England for any portion of its supply, 
so long must prices continue to be thus variable, and so long must the con- 
sumption of this important article, and the facilities for producing it, be 
small, and all the deficiency falls on the producer of food, or wool, or cotton ; for 
it is he that pays the cost of transportation, conversion and exchange. The 
consumption of the present year will not, probably, exceed 700,000 tons, for 
the make at home is greatly diminished, and the stock on hand has increased 
to an extent nearly approaching that of the import from abroad. Next year, 
there is strong reason for believing that it will be still farther diminished, 
whereas, there can be no doubt that that year, had the system of 1842 remained 
unchanged, would have seen the domestic product attain 1,300,000 tons, or 
3,000,000,000 of pounds, being 125 pounds per head; the increase for 1846 
having been almost equal to the whole consumption, per head, in 1842-3. 
Thenceforth, the price would have been regulated by the cost of production 
here, and not by the fluctuations of policy abroad ; and thenceforth the prices 
would have been daily diminishing, as the machinery of production improved. 
The object of the colonial system is that of increasing the number of trans- 
porters, converters and exchangers, who are to be supported out of the 
labours of the farmers and planters. The object of the protective system is 
to diminish the number; and the question now to be settled is, whether 
the labourers, the men who produce all that we consume, or the exchangers 
shall be masters. Were the latter to succeed, we should have perfect 
freedom of trade, so far as freedom consists in being compelled to forego 
the association of men with their fellow-men for the improvement of 
their condition, and the result would be the stoppage of every furnace 
in the Union; when all those engaged in mining coal and ore would be 
compelled to resort to the raising of food, which would be lower, while 
iron would be higher and greatly higher. Its cost in labour would be so far 
increased that consumption would fall to the point at which it stood in 1821. 
Perfect protection would soon quadruple our production, and vast num- 
bers of persons would mine iron and coal instead of raising food, which 
would be higher. The labour-cost of iron would be diminished, and the 
consumption would be increased; and it is by aid of iron that production is to 
be increased, exchanges facilitated, conversion improved, land increased in 
value, and farmers and planters made rich. 

From 1829 to 1832, the domestic production increased about fifty per cent. 
During the whole of that period, the Union was agitated by threats of 
nullification and disunion, and there existed no motive for investing in fur- 
naces or rolling-mills the large amounts required for the cheap production of 
this important commodity. From 1842 to 1847, the production trebled, and 
perhaps quadrupled. During the intermediate period it was almost stationary. 

I propose to inquire what would have been the result, had the production gone 
on to increase at the rate of only 15 per cent, per annum, and then to examine 
what would have been the effect on the working men, the planters and 



84 



THE HARMONY OF INTERESTS. 



farmers of the Union, with a view to ascertain from the experience of the 
past what is probably the true course of policy for the future. 

Starting with 200,000 tons in 1832, and increasing the product 15 per 
cent, the succeeding years would have been as follows: — 



Years. 


1000 tons. 


Years. 


1000 tons. 


Years. 


1000 tons. 


1833 . 


. 230 


1839 . 


. 532 


1845 . 


. 1230 


1834 . 


. 265 


1840 . 


. 612 


1846 . 


. 1415 


1835 . 


. 305 


1841 . 


. 704 


1847 . 


. 1630 


1836 . 


. 350 


1842 . 


. 810 


1848 . 


. 1875 


1837 . 


. 402 


1843 . 


. 930 


1849 . 


. 2150 


1838 . 


. 462 


1844 . 


. 1070 


1850 


2472 



It will be seen that the highest increase of any year is scarcely more than 
that which actually took place in years between 1843 and 1847, when every 
thing had to be recommenced, after a state of almost utter ruin. What now 
would have been the amount of investment required for the production of this 
quantity of pig-metal ? A furnace capable of prod ucing 5000 tons per week may 
cost $30,000. We can now produce 800,000 tons. To have made it 2,000,000 
would have required the building of 240 furnaces more than we have built, 
and their construction would have required $8,000,000, being far less 
than the amount that has in that period been spent in building packet ships 
to run between New York, London, and Liverpool, — leaving out of view 
all other expenditure upon shipping, whether for building or sailing 
them. The ships have disappeared, or will disappear, leaving nothing be- 
hind. The furnaces would be still in existence. At one establishment in 
Pennsylvania there are six furnaces capable of producing 800 tons of metal 
per week, or 41,600 tons per annum. The cost of these may have been 
$200,000. To build ships capable of transporting that quantity would re 
quire an investment of at least $750,000. At the end of a few years, the 
whole of that capital would be sunk, while the furnaces might last almost 
for centuries. The tendency of the colonial system is thus to compel the 
employment of capital in temporary machinery, and the object of protection 
is to enable the owner of it to invest it in that which is permanent. 

It will be asked, what should we have done with all this iron? In 
answer, I say, that every man is a consumer to the full extent of his pro- 
duction. The man who made the iron would have required food, fuel and 
clothing. The man who mined the fuel would have required iron, food 
and clothing. The man who raised the food would have required iron, fuel 
and clothing. The man who made the clothing would have required 
iron, food and fuel. The man who raised the wool and the cotton would 
have required food, fuel, iron, and clothing. Production would have largely 
increased, and there would have been a large increase in the power of con- 
suming all the commodities necessary for the convenience and comfort of 
man. In other words, there would have been a great increase in the pro- 
fits of capital and the wages of labour. 

Had production gone on at the rate I have indicated, we should have 
in the period from 1834 to the present time 15,000,000 of tons, whereas we 
have had but 5,000,000. These 10,000,000 would have filled the country 
with machinery, enabling the farmers and planters to have the consumers 
by their sides, and in addition would have given them roads by which to go 
to market at half the present cost. Their necessity for going to distant 
markets would have diminished, while their power so to do would have in- 
creased, and with every step in this progress they would have become 
enriched. 

it may, perhaps, be said that this demand for labour would have dimin- 



THE HARMONY OF INTERESTS. 



85 



ished the power to produce food and cotton. On the contrary, it would 
have increased it. Two-thirds of the labour actually employed in the 
making of this iron and its conversion into the various forms to fit it for use, 
would have been saved labour — labour that has been wasted. Further, the 
farmer and planter would have exchanged their food and cotton on the spot 
for iron, and here would have been a further and vast saving of labour. 
The increased facility of obtaining spades and hoes, ploughs and harrows, 
horse-shoes, carts and wagons, would have rendered the labour on the farm 
or plantation more productive. The rapid growth of railroads would have 
prevented the necessity for going to market with produce, and facilitated 
the transport of manure, and marl, and lime, and thus the power to apply 
labour steadily and advantageously would have largely increased. The 
neighbouring cotton-mill or woollens-mill would have furnished clothing for 
food and labour, and thus the necessity for looking to distant markets would 
have been diminished, while the power to resort to them would have largely 
increased. The increased demand for labour and its increased reward, 
would have tended largely to augment immigration, and each new arrival 
would have been a mouth to be fed and a back to be clothed, to the advan- 
tage of both farmer and planter. Farms and plantations would have been 
divided, and more food and cotton would have been obtained from small 
ones than are now obtained from large ones. The land would have increased 
in value, and the farmers and planters would have grown rich because of 
increased production and diminished cost of exchange, and a part of the sur- 
plus would have been appropriated to the purchase of books and news- 
papers, and musical instruments and pictures, and thus would intellectual 
have kept pace with moral and physical improvement. Instead of all this, 
the period from 1835 to 1843 was one of diminished production and in- 
creasing poverty and crime, ending with bankruptcy and repudiation. 

What has been said in regard to iron is equally true in regard to coal, but 
it is unnecessary to go into detail. Had the tariff of 1828 been adopted as 
the settled policy of the nation, the consumption of anthracite would by this 
time have reached 10,000,000 of tons, and the vast coal fields of the West 
would likewise be giving forth their products by millions, and thus the 
food of the farm would have been condensed into fuel and iron, fitting it for 
transportation, and providing means of transportation. Instead of this, we 
have had a series of changes that have involved in ruin almost all that have 
been largely interested in giving to the nation the extraordinary works that 
connect Philadelphia and New York with the great coal region of Pennsyl- 
vania, and State bankruptcy and repudiation have been followed by that of 
companies which have done more for the real advantage of the Union than 
any others that have ever existed within its limits, and all this has been pro- 
duced by a policy under which the whole consumption of iron was reduced 
below 40 pounds per head, when it might long since have reached 300. 

Had the production of iron and coal been allowed to increase, and the 
manufacture of cotton to grow, we should be now consuming a million and 
a half of bales ; and had the woollens manufacture been allowed to grow, 
we should now have a hundred millions of sheep, the whole of whose wool 
would be required for our domestic consumption, for those who produce 
largely consume largely. 

The perfect harmony of interests is nowhere more perfectly exhibited 
than in a thorough examination of the course of proceeding in relation to 
both coal and iron. Both were heavily protected from 1816 to 1824, but 
neither grew, because the iron manufacture, the cotton and the woollen 
manufactures, did not grow ; and so would it now be, were iron and coal pro- 
tected at the cost of cotton and wool. All wax and w T ane together, and the 



86 



THE HARMONY OF INTERESTS. 



man who would protect himself at the cost of his neighbour, makes a sad 
mistake. It is useless to produce iron without a market, and that market is 
to be found in the rolling-mill, the found ery, the machine-shop, the cut- 
ler's shop and that of the axe-maker, and they in turn must find a market 
among the producers of food, and wool, and cotton. The shipwright uses 
largely of iron, and that he may do so, there must be a large market for 
sugar, tea, coffee, and other of the luxuries and comforts of life. The 
larger the market, the larger will be the consumption of iron, and the larger 
the latter, the more rapidly will the former grow. In a wise political 
economy there will be found no discords 

CHAPTER EIGHTH. 

HOW PROTECTION AFFECTS POPULATION. 

Combination of action is indispensable to increase in the value of labour. 
The first cultivator can neither roll nor raise a log, with which to build 
himself a house. He makes himself a hole in the ground, which serves in 
lieu of one. He cultivates the poor soil of the hills to obtain a little corn, 
with which to eke out the supply of food derived from snaring the game in 
his neighbourhood. His winter's supply is deposited in another hole, liable 
to injury from the water which filters through the light soil into which alone 
he can penetrate. He is in hourly danger of starvation. At length, how- 
ever, his sons grow up. They combine their exertions with his, and now 
obtain something like an axe and a spade. They can sink deeper into the 
soil ; and can cut logs, and build something like a house. They obtain 
more corn and more game, and they can preserve it better. The danger 
of starvation is diminished. Being no longer forced to depend for fuel upon 
the decayed wood which alone their father could use, they are in less danger 
of perishing from cold in the elevated ground which, from necessity, they 
occupy. With the growth of the family new soils are cultivated, each in 
succession yielding a larger return to labour, and they obtain a constantly 
increasing supply of the necessaries of life from a surface diminishing in 
its ratio to the number to be fed ; and thus with every increase in the return 
to their labour the power of combining their exertions is increased. 

If we look now to the solitary settler of the West, even where provided 
with both axe and spade, we shall see him obtaining, with extreme difficulty, 
the commonest log hut. A neighbour arrives, and their combined efforts 
produce a new house with less than half the labour required for the first. 
That neighbour brings a horse, and he makes something like a cart. The 
product of their labour is now ten times greater than was that of the first 
man working by himself. More neighbours come, and new houses are 
wanted. A "bee" is made, and by the combined effort of the neighbour- 
hood the third house is completed in a day ; whereas the first cost months, 
and the second weeks, of far more severe exertion. These new neighbours 
have brought ploughs and horses, and now better soils are cultivated and 
the product of labour is again increased, as is the power to preserve the 
surplus for winter's use. The path becomes a road. Exchanges begin. 
The store makes its appearance. Labour is rewarded by larger returns, 
because aided by better machinery applied to better soils. The town 
grows up. Each successive addition to the population brings a consumer 
and a producer. The shoemaker wants leather and corn in exchange for 
his shoes. The blacksmith requires fuel and food, and the farmer wants 
shoes for his horses ; and with the increasing facility of exchange more 
labour is applied to production, and the reward of labour rises, producing 
now wants, and requiring more and larger exchanges. The road becomes 



THE HARMONY OF INTERESTS. 



87 



a turnpike, and the wagon and horses are seen upon it. The town becomes 
a city, and better soils are cultivated for the supply of its markets, while 
the railroad facilitates exchanges with towns and cities more distant. The 
tendency to union and to combination of exertion thus grows with the growth 
of wealth. In a state of extreme poverty it cannot be developed. The 
insignificant tribe of savages that starves on the product of the upper soil 
of hundreds of thousands of acres of land, looks with jealous eyes on every 
intruder, knowing that each new mouth requiring to be fed tends to increase 
the difficulty of obtaining subsistence ; whereas the farmer rejoices in the 
arrival of the blacksmith and the shoemaker, because they come to eat on 
the spot the corn which heretofore he has carried ten, twenty, or thirty 
miles to market, to exchange for shoes for himself and his horses. With 
each new consumer of his products that arrives he is enabled more and more 
to concentrate his action and his thoughts upon his home, while each new 
arrival tends to increase his power of consuming commodities brought from 
a distance, because it tends to diminish his necessity for seeking at a dis- 
tance a market for the produce of his farm. Give to the poor tribe spades, 
and the knowledge how to use them, and the power of association will begin. 
The supply of food becoming more abundant, they hail the arrival of the 
stranger who brings them knives and clothing to be exchanged for skins 
and corn ; wealth grows, and the habit of association — the first step towards 
civilization — arises. 

It is not good for man to live alone, and yet throughout this country, we find 
thousands and tens of thousands of men flying to the West, there to commence 
the work of cultivation at a distance from their fellow-men, -while millions 
upon millions of acres of rich land in the old States remain untouched. If, now, 
we refer to the course of events during the last thirty years, we see that 
the tendency to migration increased rapidly between 1834 and 1842, when 
the building of mills and furnaces ceased, and that during that period 
we colonized Texas and Oregon. In the years which followed, the tendency 
to emigrate diminished, to break out afresh under the influence of the 
policy of 1846. The last twelve months have witnessed the departure of 
very many thousands to California, Santa Fe, &c, while the emigration to 
Iowa, Wisconsin, and other portions of the extensive West, is entirely with- 
out precedent. 

" It is estimated," says the editor of one of the Iowa papers, 

" That between fourteen and fifteen hundred wagons have crossed the Mississippi at 
this place, within the last five weeks, bringing emigrants from Ohio, Indiana and Illi- 
nois, and all of them seeking homes in Iowa. They have,"' says he, "generally gone to 
the new counties on and west of the Des Moines river, where, we know, they will find 
lands and other agricultural advantages, equal to any in the world. Allowing five per- 
sons to a wagon, there have crossed at this place alone, between 7000 and 8000 persons. 
We are told that the same extraordinary influx of immigrants has taken place at all the 
other crossings along the river Dubuque, down to Keokuk. It is, therefore, reasonable to 
suppose that from 30.000 to 50,000 persons have been added to our population within 
the last month and a half and the tide is still pressing towards us.*'* 

If we desire to find the reason for the extraordinary tendency now prevail- 
ing to seek the West, it* may be found in the diminishing value of labour in 
the older States. The production of iron, coal, cotton and woollen cloths, 
and of commodities generally, has diminished ; and there is not only no de- 
mand for labour in the construction of new mills and furnaces, or in the 
opening of new coal mines, but the number of persons employed is actually 
diminished. The natural increase of our papulation is almost 600,000, and 
the immigration of the present year is about 300,000; and thus 900,000 



* Burlington (Iowa) Gazette. 



88 



THE HARMONY OF INTERESTS. 



persons are added, while the number that can find employment in the old 
Slates is less than it was two years since. All these people must eat, and if 
rhey cannot obtain food in exchange for labour, employed in the mining of 
coal or manufacture of cloth or iron, they must raise it for themselves, and 
hence it is that the population of the new States grows now so rapidly. 

Here is a case of apparent discord. The people of the new States 
need neighbours to help them to make roads and build churches and 
school-houses, and the state of things that injures the farmers of Pennsyl- 
vania, New York and Virginia, benefits all those who are already in Wis- 
consin and Iowa. They profit by free-trade and would be injured by pro- 
tection. Strange as it may seem, however, directly the reverse is the case. 
The harmony of interests is perfect, and the discord is only apparent. The 
new States would grow faster under protection than they now do under 
free-trade. But for the abolition of protection, in 1832-3, Iowa, Wis- 
consin, &c, would now be populous States, as I propose now to show. 
From 1821 to 1825, there existed no inducement for emigration from Eu- 
rope to this country. Wages here were low, and the difficulty of obtaining 
employment was great. The average number of immigrants was but 7138, and 
the last year was little more than the average. By 1829, it reached 24,000. 
Five years after, (1834,) it was 65,000. The average of the next nine years 
was but 72,000 ; and, in the last of those years, it was but 75,179. Like every 
thing else, immigration was stationary. In the four following years it was 
trebled. This year it may reach 230,000. It has already begun to decline. 

It is obvious that the demand for labour grows with increase in the num- 
ber of modes in which it can be applied ; and that with every step in that 
direction the return to labour increases, enabling the labourer to obtain larger 
wages — that is to say, more food, fuel, clothing, books and newspapers, and 
greater facilities for the education of his children, in return to the same 
labour. We see that the power to obtain these good things increased rapidly 
from 1830 to 1834, and that the effect was to produce a vast increase of 
immigration. With every such increase there must, necessarily, have been 
increased power of combination, accompanied by increased facilities for ob- 
taining the things for which men are willing to labour; offering new attrac- 
tions for the labourer, and producing a further increased tendency in the same 
direction. In a former chapter, I have supposed that it might by this time have 
reached 1,000,000 per annum, and that it would have done had it doubled but 
once in four years. A duplication in three years would have brought it by this 
time to 2,000.000. Taking it, however, at the former quantity, we should 
have imported in the intermediate period nearly 6,000,000, instead of less 
than 2,000,000. If we now add thereto the natural increase of all these 
people, we would have at this moment a population exceeding by at least 
5,000,000 the number we now have; and of these, while vast numbers 
would have been employed in giving value to the lands of the older States, 
by opening mines and building furnaces, millions would have sought the 
W est, the access to which would have been rendered daily more and more 
easy by the increased facility of obtaining iron for the construction of steam- 
boats and rail -roads. 

The large immigration of the last and previous years is by many ascribed 
to the troubles in Europe ; but their effect has been small. All commodities 
tend to seek the best market, and to this rule labour forms no exception. 
The people of Europe are anxious to transfer themselves here because man 
is here a commodity of more value than in Europe, and can obtain more 
food, fuel and clothing, and better shelter, in return for the same quantity of 
labour, than he can at home ; and the more widely extended the knowledge 
that such is the fact, the greater is the anxiety to reach our shores. Had 



THE HARMONY OF INTERESTS. 



89 



the demand for labour continued to increase as it did from 1844 to 1847, the 
immigration of the present year would probably far exceed even half-a-million ; 
whereas, there is every reason to believe that there will be a great diminu- 
tion. 

CHAPTER NINTH. 

HOW PROTECTION AFFECTS THE MEANS OF TRANSPORTATION INTERNAL AND 

EXTERNAL. 

The more widely men are separated, the greater is the difficulty attendant 
on the making of roads, and the greater is the quantity of labour lost to the 
farmer in performing the work of transportation, and the poorer he remains. 
The more men are enabled to combine their exertions, the greater is the 
facility of obtaining roads ; the less the labour lost in transportation, the more 
can be given to the work of production, and the richer will the farmer grow. 

During the years from 1835 to 1840, the tendency was to separation, 
and there was great need of roads. The widely scattered settlers of Illinois, 
Indiana, Michigan and Mississippi could not make them of themselves, and 
none would trust them individually with the means necessary for their con- 
struction. To remove this difficulty, they united in borrowing the food and 
clothing and the iron required for the purpose, pledging the faith of the 
State for payment of the cost, and the result was universal ruin. Men were 
scattering themselves, and labour was becoming less productive ; the con- 
sequence of which was, that immigration ceased to increase ; and it was pre- 
cisely when the growth of population from that source was arrested, that 
we were extending the area of settlement, and diminishing the power of 
combining exertion for the purpose of increasing the return to labour. 

We are now doing precisely the same thing. Men are scattering them- 
selves widely, and there is a great demand for roads. The papers from 
day to day inform us of the new ones that are being made in the West with iron 
that is obtained in exchange for certificates of debt, bearing interest, that 
must be paid. The men who should be making iron are seeking the West, 
and borrowing the iron they should be making, and, if the system be long 
continued, the result must be the same that was witnessed in 1842-3. 

It is to this unnatural expansion of a small population over large surfaces 
that is due the agitation of the question of improvement by the general 
government, one of the most dangerous now remaining to be settled. If 
the settlement and cultivation of new lands, and the formation of new States, 
proceeded naturally, the population would become sufficiently rich to be 
enabled to make their own roads and improve their own harbours ; but as 
that cannot be the case under the existing system, they look to the govern- 
ment for aid. At this moment, it is proposed that a vast amount of land 
should be given, or sold at a very low price, to aid in the making of a road 
to California, a work that, if prosecuted with vigour, would be finished half a 
century before it would pay interest on its cost, because it would tend only 
to promote the further dispersion of population, and the further diminution 
in the productiveness of labour. We need concentration to render labour 
more productive, and to promote immigration ; and if that be obtained, the 
natural and profitable settlement of the country beyond the Mississippi will 
go on so rapidly as to insure a connection with the Pacific, with advantage 
to all, in a very reasonable time. It is doubtful if there is a single instance 
on record of a road having been made with a view to attract population, or 
one that has been altogether dependent on through travel and trade, as this 
must for a long time be, that has not proved a failure. To make roads pro- 
ductive, they must pass through countries where men consume on the land 
a good portion of the products of the land, and grow rich ; and not through 

12 



90 



THE HARMONY OF INTERESTS. 



those in which, because of the absence of consuming population, every thing 
that is raised on the land is sent from the land, and its owners remain poor. 
If this road be now made, there will be great Joss somewhere, and fall 
where it may, it will be a loss to the community. 

The reason why such roads are unprofitable is, that the transportation 
upon them is almost entirely limited to bulky articles that must be carried 
at low freights. The most valuable of all commodities is man, and upon 
such roads the travel is small, for the people are poor, and must remain at 
home. Their products pay little to the road, yet the little that is left pur- 
chases but little of silk, or cloth, or other of the articles of merchandise 
upon which high tolls can be charged. Where, on the contrary, there is a 
large consuming population on the line, the way-travel is great, and the 
commodities that pass to market pay good freights, while the balance pays 
for much merchandise to be returned. 

Applying these views to the means of intercourse with foreign nations, 
we may now, I think, see why it is that shipping grows with protection. 

The merchandise we send to Europe is bulky, and the returns are com- 
pact, a consequence of which is that the outward cargo has generally had to 
bear almost all the charges of the voyage. 

From 1830 to 1834, the reward of labour was, however, such as induced a 
great increase of immigration, and thus was secured a valuable return cargo, 
the receipts from which tended largely to diminish the charges on outward 
freights, and thus the planter and farmer were enabled to consume more 
largely of the merchandise of Europe, which pays high freights, and more 
of tea and coffee, while the demand for the raw materials used in manufac- 
tures, also enabled ships to bring them as part of their return cargoes, 
facilitating the transmission of our produce and merchandise to other parts 
of the world. 

From 1835 to 1844, immigration was almost stationary. So was ship- 
ping. From 1845 to the present time immigration has grown rapidly. So has 
shipping. We now import 300,000 persons, and the usual allowance being 
two persons to five tons, it follows that shipping to the extent of 250,000 
tons, making three trips per annum, is so employed. Freights to Europe 
are low, because the return cargo is large and valuable. Ships of the first 
class are now built expressly for the importation of men, and so will they 
continue to be, if the number of passengers shall continue to increase. 
W T ith a diminution of it, the building of ships will diminish, and freights 
to Europe will rise, because a valuable return cargo cannot then be cal- 
culated upon. The rise of freights will, as a matter of course, diminish 
the number of articles that will bear exportation, and the quantity of mer- 
chandise that can be imported from Europe, while the diminution in the 
number of mouths requiring tea, coffee, and other similar commodities, will 
tend still further to diminish the tendency towards the building of ships. 

Were we now importing a million of people, the shipping required for 
that purpose alone would be 830,000 tons, and freights to Europe would be 
almost nominal, for great numbers would go altogether in ballast. What- 
ever tends to increase the bulk of the commodities imported tends equally 
to diminish the cost of transportation, and to increase the export of the pro- 
ducts of the farmer and planter. If we imported raw silk, we should import 
Frenchmen to manufacture it, and coffee for them to drink, and the ships 
that imported the silk, the men, and the coffee, would cheaply transport 
cotton or cotton cloth. If we import gutta percha, we obtain jt from one who 
desires to buy cloth, and to whom cloth can then be cheaply sent. If we 
import gutta percha goods, we obtain them from men who have cloth to sell, 
and to whom cotton cannot be cheaply sent. If we desire, then, to increase 



THE HARMONY OF INTERESTS. 



91 



our commerce and our navigation, the object is to be accomplished by the 
adoption of measures that will bring the loom to take its place by the side 
of the plough. The harmony of the agricultural, manufacturing, and ship- 
ping interests would here appear to be complete. 

With such an importation of men, there would be an annual addition of 
1,000,000 with whom we would have perfect freedom of trade, uninterfered 
with by custom-house officers, sailors, or ships. At the end of ten years, 
there would be thus made an addition of twelve or thirteen millions of 
persons, who would consume twice as much cotton as is now consumed by 
the whole people of Great Britain and Ireland. The harmony between the 
views of the free-traders and those of the protectionists would thus appear to 
be almost perfect. The more the subject is examined, the more obvious 
does it become that the only road to perfect freedom of trade lies through 
perfect protection. 

CHAPTER TENTH. 

HOW PROTECTION AFFECTS THE FARMER. 

Among the large exporters of food are Ireland, Canada, Russia, and the 
United States. 

The first exports both food and population. The bulk of her trade is alto- 
gether outward, and the food has to bear alJ the cost of the voyage out and 
home. The yield to the producer is therefore small, and tends rapidly to 
diminish, the consequences of which are, famine, pestilence, and depopu- 
lation. 

The second exports food and lumber, and imports some population for 
home consumption, and much that is exported to the United States. The 
excess of exports is, however, sufficiently great to throw nearly the whole 
weight of the voyage out and home upon the producer. 

Neither of these countries has any protection against the colonial system. 
The food they export comes back to them in the form of cloth and iron, duty 
free, and almost freight free, because the bulk of the traffic is in the outward 
direction. 

Russia exports food, but she protects manufactures, and thus makes a market 
for much of it at home. Her capacity to supply grain is by one authority 
stated to be equal to 17,000,000, and by another 28,000,000 of quarters. 
(153 and 252 millions of bushels of 60 pounds weight,) and we are told 
that — 

"In the years when there is no foreign demand for this surplus, a portion of it is em- 
ployed, with little regard to economy, in fattening cattle for the butchers, and for the sake 
of the tallow. Much is absolutely wasted, and the remainder, left unthreshed, becomes 
the prey of birds and mice." Also that " if a foreign market could be found for it, Russia 
could easily export annually 50,0011,000 of quarters of grain, (equal to 450,000,000 of 
bushels of sixty pounds weight.)"* 

The system of that country is adverse to the growth of wealth and in- 
telligence. Large armies and hosts of officials are maintained out of her heavy 
taxes, paid from the earnings of the producing classes, while the existence 
©f serfdom, and the necessity for giving so large a portion of the lives of the 
healthiest and best-formed of the population to the business .of carrying 
sabres and muskets, tends to prevent the existence of any hope of improve- 
ment; and without hope there can be little disposition for exertion. Never- 
theless, as we see, the Russian has food to waste, while Irishmen perish by 
tens of thousands of starvation. 

In this country the system of protection exists. It is now limited to thirty 

* London Economist. 



92 



the harmony of interests. 



per cent. ; and for the last twent}>- years it has but once, and for a very brief 
period, been at a lower point. By its aid there has been produced a 
diversification of pursuits, that enables men to economize much time and 
many things that would otherwise be wasted, while women and children find 
employment at such wages as enable them to be large consumers of both 
food and clothing. Wages are high, and hence it is that there is so large an 
import of the most valuable of commodities — man. 

We imported last year about 300,000 persons. Estimating their con- 
sumption of food at twenty cents per day for each, there was thus made a 
market on the land for the products of the land to the extent of twenty mil- 
lions of dollars. Their transportation required the constant employment of 
250,000 tons of shipping, and ships carried freight to Europe at very low 
rates, because certain of obtaining valuable return cargoes. The farmer 
thus obtained a large home market, and the power of exporting cheaply to 
the foreign one, and to the conjoined operation of these two causes is due 
the fact that wheat and flour have continued so high in price. 

We may now, I think, understand many curious facts now passing before 
our eyes. Food is so abundant in Russia that it is wasted, and yet among 
the large exporters of food to Great Britain is this country, in w r hich it sells 
at a price almost as high as in Liverpool, and now even higher. The 
produce of Russia has to bear all the charges out and home, and the con- 
sequence is, that the producer remains poor and makes no roads, and 
thus the cost of transportation, internal and external, continues, and must 
continue, great. The farmer of the United States sends his produce to 
market cheaply, because the return cargo, being chiefly man, is valuable, and 
the space it occupies is great. He therefore growls rich, and makes roads, 
and canals, and builds steamboats; and thus is the cost of transportation, 
internal and external, so far diminished that the difference in the price of a 
barrel of flour in Pittsburgh and in Liverpool is, when we look at the distance, 
almost inconceivably small. 

The bulk of the trade of Canada is outwards ; and the consequence is 
that outward freights are high, while our imports of men and other valuable 
commodities keep them low with us, and therefore it is that the cost of trans- 
porting wheat and flour from our side of the line is so much lower than 
from the other, that both now pass through New York on their way to Liver- 
pool.* Hence it is that there has arisen so vehement a desire for commercial re- 



* From one of the journals of the day I take the following extract from a Canadian 
letter : — 

" Our commercial relations with your Union are a subject of great anxiety with us at the 
present time. Wheat is worth from 2s. to 3s., York, more on your side of the Lake than 
on this. This is owing to two causes : the 20 per cent, duty you impose upon our grain 
when imported and sold in your market, and the want of a sufficient number of resident 
wheat buyers who have sufficient capital to enable them to take advantage of your bond- 
ing Act. If your Cabinet has determined to annex us, they will refuse us reciprocity. In 
1847, we exported of Canada wheat, 3,349,686 bushels, and in 1848, 3,413,397. We shall 
export, at least, twice as much this year; for every acre of land that was in a condition to 
grow wheat was sown with that grain, and the crop throughout the whole of Western 
Canada, except perhaps the Middle District, is unusually heavy. 

The Examiner' estimates, and I think with tolerable accuracy, that our farmers will 
this year lose $1,500,000, from a want of having free access for their produce to your 
markets. The Convention of Delegates from each of these Provinces, now sitting at 
Halifax, have under consideration the question of securing a more easy interchange of 
commodities between the Provinces and the States. A notion has got abroad, that if 
Canada, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland were 
united, they would then have a better chance of obtaining free trade from you than in 
their present isolated condition. It is rumoured that the Home Government, for some 



THE HARMONY OF INTERESTS. 



93 



ctprocity, and even for annexation. The protective system has thus not 
only the effect of bringing- consumers to take their places by the side of 
the producer, facilitating the consumption on the land of the products 
of the land, and facilitating also the exportation of the surplus to foreign 
markets, by diminishing outward freights, but the further one of producing 
among our neighbours a strong desire for the establishment of the same per- 
fect freedom of trade that now exists among the several States, by becoming 
themselves a part of the Union. Protection, therefore, tends to the increase 
of commerce and the establishment of free trade, while the British system 
tends everywhere to the destruction of commerce and to the production of a 
necessity for restriction. 

We see, thus, that if we desire to secure the command of that which is 
falsely called "the great grain market of the world," it is to be effected by 
the adoption of such measures as will secure valuable return freights. The 
most costly and the most valuable of all are men. The least so are pig-iron 
and coal. The more of the latter we import, the larger will be our surplus 
of food, the higher will be the outward freight, internal and external, the 
greater will be the waste, and the poorer will be the farmer. The more of the 
former we import, the smaller will be our surplus of food, the lower will be 
the outward freights, and the more numerous will be the commodities that 
can go to Europe, to be given in exchange for luxuries that now we cannot 
purchase. 

Were we now importing a million of men annually, the downward freights 
on our canals and railroads would be greatly diminished, while the outward 
freight across the ocean would be little more than would pay the cost 
attendant upon loading and unloading it, and yet we should be building 
ships and steamboats, and making railroads at a rate of which we could now 
form no conception. 

By aid of these men, coal and iron would be produced by millions of tons, 
and the increased facility of obtaining food and iron would give new facilities 
for building cotton and woollen mills, and type-foundries and printing-offices, 
and all the men employed in them would be large consumers of food, and 
thus would the farmer gain on every hand. 

The labourer, in Ireland, obtains 6d. or Sd. for a day's labour when em- 
ployed, but the average of the year is even less than the former sum. He is 
our great customer for Indian corn, the cost of which, by the time it reaches 
him, is about 4.9. or five times what it has yielded to the farmer, delivered 
on his farm. Eight day's labour are thus required for the purchase of a 
bushel. Transfer that man to the coal-fields of Ohio or Indiana, and he 
may purchase far more by the work of a single day. He at once becomes 
a much better customer for food, and is enabled to consume largely of sugar 
and coffee, to the advantage of the merchant — of wool, to the further advan- 
tage of the cultivator of the land — of lumber, to the advantage of the man 
who has land uncultivated that he desires to clear — of cotton, and indigo, 
to the benefit of the planter — and thus it is that every interest in the country 
profits by the transfer of the poor cultivators of Ireland, and of Germany, to 
the coal fields and iron-ore beds of the Union. 

The young Englishman who aspires to be an operative spinner, and now fills 

purpose of its own, has recommended this federation, and of course the Colonial puppets 
who move at the dictation of Downing street, will pretend that a measure which has been 
forced upon them, originated in the commercial necessities of the Provinces. To obtain 
the free trade they desire, the Nova-Scotians showed symptoms of a willingness to admit 
your fishing vessels a little nearer than within three miles of their shores ; and Canada 
would probably throw open her coasting-trade to your vessels, if England will permit her 
after the new Navigation Law comes into operation." 



94 



THE HARMONY OF INTERESTS. 



the place of the latter in his absence, receives 7s. 6d. — $1*80 per week,* 
the price of two bushels of Indian corn. Place him in Alabama, and he will 
earn the present price of twenty bushels, and he will then eat more and 
better food, and consume ten pounds of cotton where now he consumes 
but one. 

The hand-loom weavers, of whom England has 800,000, without work for 
one-third of the number,! consume little food or cotton. Transfer them 
here, and they will become large consumers of both. 

The agricultural labourer of England receives 8.s. or 9s. a week, little 
over the price of a bushel and a half of wheat. Transfer him here, and 
his services as a miner, or labourer, will enable him to earn the price of five 
or six bushels. He will then consume more and better food, and largely 
of cotton. 

The poor Highlander, driven from his native hills to make room for sheep, 
starves in the miserable lodging-houses of Glasgow.^ Could he be trans- 
ferred here, he would become a large consumer of food and clothing. 

Our present poliey is directly the reverse of all this. We are exporting 
men by tens of thousands to California, and by hundreds of thousands to 
the West, thus diminishing the power of combination of action, and increasing 
the necessity for the use of ships and wagons to carry their produce to 
market. Thus far the immigration has been maintained, and freights to 
Europe are consequently low, but, with the diminished wages of the labourer, 
immigration must fall off, and then freights must rise, and thus the same 
measures that diminish the home consumption must increase the cost of 
going to the distant market. The cost of the voyage out and home must 
be paid by somebody. If there is no return freight, the farmer or planter 
must pay the whole. If there is a large and valuable return freight, he- 
need pay scarcely any portion of the cost. To California, we mur pay all the 
outward freight, for there is no cargo to be returned. Bulky articles, the 
produce of the farm, cannot, therefore, go from here, &\A Ine consequence is, 
that every emigrant to that country is a customer lc<s. to the farmer, an<i a 
customer to a diminished extent to the planter. 

The most costly and most valuable of commodities, as I have already said, 
is Man. The more valuable the commodities that can be imported into 
any country, without going in debt for them, the richer that country wiJJ 
grow ; and this is equally true of every State, county, township, town, 
&c, into which it may be divided. Of this no one can doubt, and yet 
every portion of the Union is engaged in expoiting to the West, to Texas, 
Oregon, and California, this most valuable of all commodities, receiving 

* London Economist, Vol. VI. p. 259. 
■j- Edinburgh Review, October, 1849. 

t A recent British journal, speaking of the Queen's visit to Scotland, thus describes the 
effects of the desolating policy that has been pursued in the Highlands : — 

" The untilled hills and glens tell their own story most effectually. The sheep farms of 
twenty miles length and breadth proclaim the dark character of that policy which is fast 
making of the Highlands a great hunting-ground. Her Majesty is to pass through a land 
of Ameers. The same wretched policy as that which has desolated Scinde, originating in 
the same miserable cause — the selfishness and pleasure-seeking of the owners — has laid 
waste the Highlands. They want a Sir Charles Napier — a legislative if not a military 
Napier. They need the repeal of the game and entail laws, and with those laws repealed, in 
twenty years there would be no difficulty in finding a population to welcome the monarch on the 
beautiful but now desolate shores of Loch Long and Loch Awe. The pines§ would flourish 
again ; and newspaper reporters would not be weighing the question whether there be 
or be not a habitable house where they might rest within ten miles of Loch Laggan,"— 
North Br dish Mail. 

§ The standard of the Campbells, who inhabited this region, bore a pine. 



THE HARMONY OF INTERESTS. 



95 



nothing in return. We import now hundreds of thousands, yet the old States 
retain scarcely any of them. All must go West, for the working of mills and 
furnaces is stopped, and the building of mills is at an end until we have a 
change of policy. Such is the effect of the colonial system, established for 
the purpose of preventing combination of action among the people composing 
various nations of the world, and maintained by the pursuit of measures 
destructive alike to the interests of the people of England, and of the world 
at large. "Many of our manufacturers," says a Manchester broker, " have 
exported to a loss, and if, by so doing, they have kept foreign competition at 
bay, and checked the increase of industrial establishments abroad, it is an 
unenviable success; still," he adds. " as this country is doomed to be a manu- 
facturing state, nothing remains but to beat or be beaten."* 

These losses are of perpetual recurrence. They are a natural conse- 
quence of the " war upon the labour and capital of the world," in which 
England must " beat or be beaten." They must be paid by somebody, and 
they are paid by the labourers of England, who are compelled to work at 
diminished wages ; but to a much greater extent by the labourers of the 
world, who are compelled to be idle, earning nothing to pay the farmers and 
planters for food and clothing, when they would gladly be employed, earning 
wherewith to feed and clothe themselves and their children. 

How small is, under these circumstances, the power to consume food, 
will be obvious to those who see that three-fourths of the people of England 
are consumers and not producers, and that yet their import of grain of the 
last two years of free trade is but two bushels per head. How insignificant 
is the quantity she takes from us, and trivial the amount when distributed 
among the people of the Union, may be seen from the following statement 
of the last two years of comparatively large export : — 

Flour. Wheat. Corn. Corn-meal. 

Barrels. Bushels. Bushels. Barrels. 

Year ending June 30, 1848, 958,744 1,531,000 5,062,000 226,000 

Aug. 31, 1849, 1,114,016 4,684,000 12,721,000 88,000 

The last and largest amounts in round numbers, to 10,000,000 of bushels 
of wheat, and 13,000,000 of bushels of corn. Deducting the transportation, 
the product of this on the farm may be taken at not exceeding, and pro- 
bably not equalling $10,000,000, or less than fifty cents per head for the 
people of the Union. What is the prospect that even this amount will con- 
tinue to be exported may be judged by the facts that nothing but the 
exceeding lowness of freights has thus far maintained the export, and that 
calculations, based upon the low price of food in Europe, are now being 
made upon the export of grain to this country. 

" The accounts that have reached us from your side about the wheat crop have led to 
an idea here that it is not improbable the United States may become an importing country 
for grain, as on some previous occasion about ten or twelve years ago. We regard this 
as highly improbable ourselves, although Sturges allude to it in their commercial circular 
to-day. It is said Mark Lane governs the world's grain prices: and, if so, the European 
range may certainly be expected to be very low, for the fall here is fully 5s. to 6s. per 
quarter, one-sixth of the entire value, within the last month. Oats are down to 16s. per 
quarter.'" — London Correspondent of the National Intelligencer. 

The shipments of both wheat and flour have already fallen off in a most 
extraordinary degree, since freights have somewhat advanced. In Septem- 
ber, flour was carried to Liverpool for 6d. a barrel, and sometimes even 
less. The lapse of two months has brought the charge up to 18^., and the 



Circular of Du Fay & Co., March 1 } 1848. 



96 



THE HARMONY OF INTERESTS. 



effect is shown in the following statement of the export from the principal 
ports of the Union from the first of September to the latter part of Novem- 
ber : — 

Flour. Meal. Wheat. Corn. 

Barrels. Barrels. Bushels. Bushels. 

1849 . . . 118,000 1,210 212,504 544,874 

Last year, same period 491,000 27,754 849,350 3,447,820 



Decrease . . . 373,000 26,544 636,846 2,902,946 

Notwithstanding the large increase of agricultural population, the quantity 
of wheat and flour received at tide-water, on the Hudson, shows a diminu- 
tion, while the only increase is that of about 2,000,000 of bushels of corn, 
which found a market abroad only because of the very low freights. 

The import of men has made a market for $20,000,000 worth of food, and 
these people, once here, remain consumers of food, and customers to the 
farmer, unless compelled to become producers of food and rivals to the 
farmer. 

The "great grain market of the world" has absorbed half as much 
because of the low freights, but with the advance of freight it is now 
diminishing, and must still further diminish with the continuance of that 
advance. "Since the commencement of the California excitement, near 
seve,. hundred vessels," we are told,* "have left for the Pacific, many of 
w r hich will never re-visit us." These ships will not be replaced unless 
freights be sufficiently high to pay their owners. If immigration go on, they 
will be soon replaced, and the cost of doing it will be paid by immigrants 
who come to be customers to the farmer and planter. If it do not, they will 
not be replaced, and the high freights of the remaining ones must be paid 
by the farmers and planters seeking customers in Europe. 

That immigration will be arrested, must be obvious to all who study the 
tables given in the third chapter. The difficulty of obtaining food, fuel, and 
clothing — i. e. wages — in return for labour, is increasing. The value of 
man is falling, and the inducements to immigration are passing away. 
Should it diminish next year to the extent of 100,000 persons, there will be 
a loss of market to the extent of $7,000,000. The California excitement 
which carried off so very many thousands of the customers of the farmer, 
with food to feed them on the road,t will no longer exist. Here is another 
hundred thousand customers lost to the farmer, and with them a demand 
for another $7,000,000 worth of food. The European market is being 
closed. Nothing that diminishes production can maintain prices. 

A comparison of the amount of immigration and the prices of wheat 
during the last few years, will show how essentially the interests of the 
farmer are connected with every operation tending to bring the consumer 
to take his place by the side of the producer : — 

Years. Immigration. Price of Wheat in Philad. Price of Flour in N. Y. 

1840 . 84,000 . . $1-00 . . $5-25 



1841 
1842 
1843 
1844 



83,000 
101,000 
75,000 
74,000 



94 
112 
75 
89 



5-72 
5-74 
4-47 
4-70 



* New York Herald. 

j- « Your receipts of beef from Missouri will be very moderate this winter, in conse- 
quence of the great demand for cattle to carry emigrants to California." — Correspondent 
of the Tribune. 



THE HARMONY OF INTERESTS. 



97 



Years. Immigration. Price of Wheat in Philad. Price of Flour in N. Y. 

1845 . 102,000 . 86* . . 4-52* 

1846 . 147,000 . . 1 04 . . 5-23 

1847 . 234,000 . . 1-33 . 5-96 [potato rot.] 

1848 . 229,000 . . 1-19 . about 5-25 

1849 . 299,000 500 

If we convert into iron delivered back upon the farm, free of duty, nil 
the food tha; has been this year exported, we shall find that it will yield 
250,000 tons, or twenty-five pounds for every person of the population. Let us 
now go to the vicinity of a furnace, and see how light, by comparison, is 
the charge for iron when it is produced on the spot, and paid for in com- 
modities oi which the earth yields by tons, as potatoes or hay — or in straw 
that would otherwise be wasted — or in labour not required on the farm, ami 
then estimate how many tons might have been obtained by the producers of 
this grain, had they made a market on the land for the products of the land. 

Let us now suppose that instead of closing old furnaces we had built fifty 
new ones, each capable of making 5000 tons, with rolling-mills to convert 
the product into bars, and had thus applied the labour of some of those im- 
migrants ; and that we were now making, as we might readily be doing, 
250,000 tons of iron more than was made last year, would not that alone 
have made a permanent market on the land for as much of the products of 
the farmer as we have exported to England ? Would not that have reduced 
the cost of iron ? Would it not have raised the price of labour? Would it 
not have promoted immigration? Would it not have promoted the building 
of ships and the reduction of freights? Would not the farmer thus have 
had the control of the market of England to a much greater extent than he 
can have under a system that discourages immigration and ship-building? 
Does not his power to go abroad increase with the diminution of the necessity 
for seeking a market abroad ? If we were importing largely of raw silk 
and men from Italy, could we not send cotton yarn to Italy more cheaply 
than it now goes through England ? — and if we were importing silk weavers 
from France, could we not send to France, in return, food, in the form 
of coalt and iron, at less cost for freight than that at which they now have 
English coal and iron that must pay all the cost of the voyage out and 
home ? The greater the value of the import trade — and men are the most 
valuable commodities we can import — the greater will be the variety of 
articles we can export. 

It is contended that by having- two markets to which he must resort, the? 
condition of the farmer is improved, and that if he had but the home-market 
he would have lower prices than at present — that is to say, that if he could 
sell all he produces at home, he would obtain less than he now obtains or 
going from home. Directly the reverse is the fact, when men are compelled 
to seek a distant market. 

The first questions to be asked in reference to this are — Why is- he 
obliged to go from home ? Why does the supply of food increase faster 
than the demand? For this there are two reasons. First: we db not 
import consumers enough ; and, Second : of those whom we do import, 
too many are forced to become producers of food, in consequence of the 
difficulty attendant upon employing themselves in other pursuits-- where 
they would be consumers of food. The man who works in a coal) mine 
earns $300 a year, and perhaps more. Much of this goes for food, 

* Some of these variations are, of course, attributable to the extent of the crop. The 
yield of wheat in the West in this year was larger than in any since 1839. 

■j- Offers have been made to transport coal to France at little more than the ordinary 
freight from Philadelphia to Boston. 

13 



98 



THE HARMONY OF INTERESTS. 



and all of it goes in payment for things that are the product of the 
earth, for every man is a consumer to the full extent of his production. 
Ten thousand miners and labourers are customers for those products to 
the extent of $3,000,000. Forty thousand mechanics, miners, and labourers, 
are customers to the farmer and planter to the extent of $12,000,000, 
which is far more than we can expect to export in future years. We 
now import annually above a quarter of a million of people, and there 
are half a million of our own home-grown population annually attaining 
maturity. By deducting from agriculture 20,000 working-men we diminish 
the number of producers, and by employing these 20,000 in other pursuits 
we increase the number of consumers to such an extent as to prevent the ex- 
istence of the surplus of which we now complain. Judging, however, from 
the past, the adoption of protection as a permanent system would result in 
the increase of immigration to a vast amount, and of these a large proportion 
would gladly remain consumers of food, whereas under the present system 
they are compelled to become producers of food. 

When farmers have a demand at home for all they raise, they obtain a 
higher price than when they have to go abroad. In the one case, they ob- 
tain nearly as much more than the price in distant markets as the cost of 
transportation from those markets, whereas, when they have to go abroad, 
they obtain as much less than the price in those markets as the cost of trans- 
portation to those markets, and the price of the whole is regulated by that 
which can be obtained for the trivial surplus. Grain and flour have for several 
years been higher in the coal region of Pennsylvania than in Philadelphia, 
because the demand has been always in excess of the supply. Close the 
mines, and the farmers will have to send their products to Philadelphia, re- 
ceiving therefor the city prices, minus the cost of transportation. At the 
present time, the price of grain throughout the Union is maintained wholly 
by the domestic market, for flour sells in Liverpool at less than the price in 
New York. Close the mines and factories, and convert miners and me- 
chanics into farmers, and the price at home must be the Liverpool one, 
which will then be lower than at present, minus the cost of transportation, 
which will then be higher than at present. 

Admitting, however, that we are to have at all future times, a surplus of 
grain for export, the next question would be — What is the course that will 
secure to the farmer the highest price in foreign markets ? The answer 
must assuredly be, that it will be that which tends most to diminish the 
quantity to be sent to those markets from this or other countries. If, then, 
the present system of the commerce of the world tends to increase the 
supply, it must be adverse to the interests of the farmer. That such is the 
case can, I think, readily be shown. 

We know that the more miners and mechanics we have, the more food we 
consume; and that the more agriculturists we have, the more food, we pro- 
duce. Such, then, must be the case with other countries. We know that 
under the protective system miners and mechanics increase in number, and 
that under the free-trade system the producers of food increase in number. 
Such, then, must be the case with other countries. It is obviously, then, to 
our interest that Russia and Germany should consume more food and 
export less, and that if they and we should do so, the price of food would 
rise. Russia and Germany, and we ourselves, have established the pro- 
tective system, and the result has been to increase the consumers and 
diminish the producers; and if all the world could follow our example, the 
supply of food now pouring into "the great grain market of the world" 
would be so far diminished that the price would rise. This, however, is 



THE HARMONY OF INTERESTS. 



99 



but one of the effects that would result from a general determination to put 
down the colonial system. 

We have seen that the consumption of cotton in other countries is small, 
while here it is large. The price has already fallen so low that the planters 
are resorting to the cultivation of wheat, a measure that must tend to the 
injury of the farmer. Now, if we were consuming one half more cotton 
than at present, this state of things could not exist. The price obtainable 
by the planter would then be sufficiently high to prevent the necessity of 
abandoning its culture. Let us now suppose that Canada, and Russia, and 
Germany, and Ireland, could make a market for their now surplus labour, and 
thereby enable themselves to consume two or three pounds of cotton, where 
now they consume but one, and to consume more food than now they do — is 
it not obvious that the prices of food and cotton would both rise ? That such 
would be the result of the abolition of the colonial system, as regards these 
countries, appears perfectly certain. If so, then the maintenance and ex- 
tension of the protective system, with special reference to the entire abolition 
of that unnatural one which Great Britain has established, appears to me to be, 
most certainly, to the interest of the farmers as well as of the planters o f the 
Union, and of the world. 

Let us next examine the working of the system in Canada, in which there 
being, almost literally, no manufactures of any kind, there is no market on 
the land for the products of the land. 

Freedom of trade is, there, perfect : that is to say, the people of Great 
Britain enjoy a complete monopoly of the machinery by aid of which alone 
the lumber and food of the people of Canada can be converted into cloth 
and iron. The consequence is, that the labour-cost of manufactured arti- 
cles is so great that the consumption of them is small. The whole 
export cf cotton cloth from Great Britain to her North American pos- 
sessions, in the seven years, 1840-46, averaged twenty millions of yards, 
fine and coarse, and if the whole were there consumed, it would give but teij 
yards per head, or about two and a half pounds of cotton to each individual: 
whereas the consumption of the Union averages thirteen pounds per head, 
and io far more than that in the States nearest to Canada. If, now, we desire 
to know why it is that consumption is less on the one side of the line than 
on the other, the reason may be found in the fact, that the Canadian gives 
much more labour for his cloth and his iron than the American. Even his 
wheat is less in price ; and if so, how must it be with those bulky com- 
modities that will not bear transportation? He must, in the words of Sir 
Francis Head, " eat all he raises," for he has not made, nor can he make a 
market on the land for the products of the land. 

To the Canadians it is perfectly obvious that the price of food with us is 
maintained by the demand for home consumption, and therefore it is that 
there exists so universal a desire for the abolition of all restriction in the 
importation of their productions into the Union. They have perfect freedom 
of trade with "the great grain market of the world," and by it they are ruined. 
They desire intercourse with the great grain-producers of the world, and to 
obtain it they would gladly sacrifice their intercourse with England, taking 
production in lieu of free trade, and becoming members of the Union. 

Were Canada within the Union, her consumption of cotton would rise to 
a level with our own, for she would at once commence to make iron and cloth 
at home, producing thereby a demand for labour that is now being wasted. In- 
stead of being a customer to the planter to the extent of two and a half pounds 
per head, every Canadian would take a dozen pounds ; and thus would fifteen 
millions of pounds be added to the consumption, to the infinite advantage of the 
planter. The farmer of Illinois might then safely admit of free trade with 



100 



THE HARMONY OF INTERESTS. 



his Canadian neighbours, because with increased home consumption they 
would experience less necessity for going- abroad to find that market for their 
products which the colonial system now denies to them at home. The farmer 
who believes in the advantage of free trade with England, should give bis 
vote for the free admission of Canadian wheat, raised by men who consume 
cloth and iron made by men who eat the wheat of Poland and Russia. The 
farmer who sees that the price of wheat is maintained by the home demand, 
will be cautious of the admission of foreign wheat, duty free, until, by means 
of annexation, the farmer of Canada shall obtain the same protection that he 
himself enjoys, and thereby be enabled to make a market on the land for the 
products of the land. 

Having thus examined the effects of protection, let us now look to what 
would be the effects of the adoption of perfect freedom of trade, as urged 
upon the world by England. It could not fail to be that of rivetting upon 
the world the existing monopoly of machinery for the conversion of the 
products of the farm and the plantation into cloth and iron, closing the fac- 
tories and furnaces of Russia, Germany, and the United States, and com- 
pelling the people who work in them to seek other modes of employ- 
ment, and the only resource would be to endeavour to raise food. There 
would then be more food to sell ; but who would buy it ? We have 
already seen that the whole exports of Great Britain amount, after paying 
for the grain she now imports, to but $4 32 per head, and that, small 
as it is, it tends to diminish. With that she has to pay for her sugar, 
tea, coffee, cotton, wool, lumber, and all other foreign articles required 
for her own consumption, leaving her no power to pay for more grain. 
Nevertheless it would be poured into her markets, and the consequence would 
be that she would obtain three bushels where now she has but one, precisely 
as-we have seen to be the case with cotton. "Mark Lane governs the world's 
grain prices," and as the price obtainable for the surplus would fix that of 
the crop, the result would be, that the farmers would everywhere be ruined, 
and this with no benefit to the manufacturers of England, for her farmers 
would likewise be ruined, and her agricultural labourers would be discharged 
as is now the case with Ireland, whose population, deprived of employment at 
home, swarms to England, and destroys the power of the English labourer 
to obtain food, even at its present low prices — and the lower they fall, the 
less must be the demand for labour, and the less the power to obtain wages. 

The proverb says, " put not too many eggs in one basket." The object 
of the British system is, and has always been, that of compelling the world 
to put all the eggs in the same basket; and the natural result is the occur- 
rence of perpetual convulsions, producing devastation and ruin throughout 
the world, whenever her artificial system becomes deranged. A review of 
her operations, during the past thirty years, shows her, at every interval of 
four or six years, holding out to the world the strongest inducements to send 
her all they could spare of sugar, and coffee, and cotton, and agricultural 
produce of every description. About the close of the second year of this 
movement, when the machinery of importation had got into full operation, 
a change is seen to have " come over the face of the dream," and the whole 
energies of the country to have been directed to breaking down prices, with a 
view to compel exportation. The farmers and planters whom she so recently 
courted are now ruined. Their agents are selected as the first victims, and 
if the result be bankruptcy, public or private, it is followed by vituperation 
of the foulest kind ; and thus is insult added to injury. The people of 
Pennsylvania and Maryland, Indiana and Illinois, Michigan and Mississippi, 
have had to endure all this, the result of the working of the Compromise tariff 
of 1833. In 1846, tho whole world was urged to send food at any price. 



THE HARMONY OF INTERESTS 



101 



In 1847, the whole object was to depress prices. Rice was sold for the mere 
freight and charges. Large shipments of corn brought the shippers in debt 
for the payment of those expenses. The fever and the chill having passed 
away, there is next seen to succeed a period of languor: then one of moderate 
activity, such as is now beginning to make its appearance. Next, specula- 
tion, excitement, and large imports, to be followed by the ruin of all around, 
in the effort to save herself. At the present moment, she takes certificates 
of debt in payment for iron, as was the case ten years since ; but the day is 
not far distant when these certificates will have to be redeemed with gold. 

Were it proposed to the people of the Union to make New York or Penn- 
sylvania the deposit for all the products of the Union that required to be 
converted or exchanged, the absurdity of the idea would be obvious to every* 
one. The wheat-grower of Michigan would find himself entirely at a loss to 
know why he should exchange with the neighbouring wool-grower by way 
of New York; and the cotton-grower of South Carolina would be equally at 
a loss to see the benefit of a system that should compel him to exchange with 
the wheat-grower of Virginia, through the medium of Philadelphia or Pitts- 
burgh ; yet such is precisely the object of the colonial system. The wheat 
of Michigan travels to Liverpool with the wool of Michigan, and the exchanges 
between the wheat-grower and the wool-grower are effected through the 
market of Leeds, three-fourths of the wool and the wheat being lost on the 
road. The rice of South Carolina goes to Manchester in company with the 
cotton of South Carolina ; and the corn and the cotton of Tennessee cross 
the ocean together; and this long journey is performed under the idea that the 
planter can obtain more cloth for his rice, or the farmer more iron for his corn, 
by this circuitous mode of exchange than he would do if the exchanges were 
made on the spot. There are many who doubt the truth of this, yet ail 
English politico-economical writers assure us that such is the fact ; and every 
measure now adopted by the British Government is directed towards the 
maintenance of the monopoly of machinery, by aid of which the people of 
the world have been compelled to make their exchanges in her factories. 

If such a course would, under any circumstances, be absurd, how much 
more absurd is it in a case like the one under consideration, where the power 
of purchase is so small, and so little capable of increase. Whatever goes to 
England must be there consumed, unless it can be forced off by means of 
low prices; and for what she consumes, be it much or little, she has $4-32 
per head of her population to distribute, in the form of cloth and iron, among 
the farmers and planters of the world. It is a Procrustean bed, and the mis- 
fortune of the poor farmers and planters is, that whatever she cuts off from 
the portion sent to her is, as a consequence of the system, cut off from all the 
crop. 

The producers of the world have been, and they are now being, sacrificed 
to the exchangers of the w r orld ; and therefore it is that agriculture makes so 
little progress, and that the cultivators of the earth, producers of all we con- 
sume, are so universally poor, and so generally uninstructed as to their true 
interests. The day, however, cannot be far distant when our farmers and 
planters, at least, will be satisfied that their interests cannot be promoted 
by a system that separates the consumers from the producers, and renders 
cloth and iron so costly as to cause the average amount of the consumption 
of either to be utterly insignificant. 

The object of protection is that of diminishing the distance and the waste 
between the producer and the consumer; thereby enabling the producer to 
grow rich, and to become a large consumer of cl-oth and iron. That it did 
produce that effect is obvious from the immense increase in the consumption 
of both in the period between 1843 and 1847. That the facility of obtaining 



102 



THE HARMONY OF INTERESTS. 



iron enabled the farmer to improve his mode of production and obtain large 
returns is obvious from the fact that the supply of food increased so rapidly. 
That the free-trade system produces the reverse effect, is obvious from the 
great reduction in the consumption of iron in the years 1842 and 1843, and 
from the reduction now going on; the whole consumption of this year 
not equalling that of 1847, notwithstanding the vast increase of population. 

The producers of food throughout the world have one common interest, 
and that is to be promoted by the abolition of the existing monopoly system, 
which tends to destroy themselves and their customers. 

The farmer is also a producer of wool, and therefore I will briefly allude 
to that interest. 

1 If we desire evidence of the truth of what has been said in relation to food, 
it may be found in the condition of the wool market for several years past. 
Our production is less than our ordinary consumption, and the consequence 
is, that the price is higher than in any country of the world, by the whole 
amount of the cost of transportation.* Close the woollen mills, and the price 
must fall to the level of the markets of Europe, minus the cost of exporta- 
tion. The increased supply then would, as a matter of course, produce a 
fall of prices, and then the sheep grower would be ruined. 

The changes of policy of the last twenty years have several times ruined 
the woollen manufacturers, and the sheep growers have as often extermi- 
nated their flocks ; the consequence of which is, that we have less than 
30,000,000, when, if the policy adopted in 1828 had been maintained, we 
should now have 100,000,000, and a market for their whole products at 
higher prices than now; for the prosperous labourers, miners and mechanics, 
cotton-growers and food-growers, would then consume six pounds where 
now they consume but three, and the number of our population would be 
greater by 7,000,000 than at present. The discord that now exists is the 
result of the "war upon the labour and capital of the world" maintained by 
England, and when peace shall have been restored by the abolition of the 
monopoly, it will be found that, between the interests of the sheep-grower, the 
producer of food, the miner and the mechanic, there is perfect harmony. 



CHAPTER ELEVENTH. 

HOW PROTECTION AFFECTS THE PLANTER. 

Having thus shown how the English, or colonial, system operates upon 
the farmers of England and of the world at large, I propose now to examine 
how it operates upon the planters. 

Of all the products of the earth, cotton is that which is best fitted for 
clothing purposes, and that which would be most universally used 
were it accessible to those who desired to use it, which it is not. There 
are few commodities that can be more easily raised, none that can be con- 
verted into clothing at less cost of labour, and yet, so defective are the 
arrangements for its distribution, that by the time it reaches the consumer 
it has become so costly that its consumption is almost nothing. 

The whole quantity of cotton raised is probably 1,500,000,000 pounds 
being about one and a half pounds for each person composing the popula 
tion of the world ; yet, notwithstanding the exceeding smallness of this quan- 
tity, the power of consumption throughout the world is ro small that the 



THE HARMONY OF INTERESTS. 



103 



producers are contending with each other for the possession of the markets : 
and the competition is so great that whenever the crop of this country reaches 
1000,000,000 pounds, it is sold at a price Jess than the actual cost of pro- 
duction. Some of the countries that formerly exported it to a considerable 
extent, now raise little more than is needed for their own small consumption ; 
and even here the question of limiting the quantity, as the only way to 
avoid ruin, has been the subject of anxious discussion. Throughout the 
South, planters are turning their attention to food, although the market 
for every description of food is, and must continue to be, glutted, unl-ess 
we have a change of policy. 

There is a perpetual complaint of over-production, and it is matter of 
rejoicing when, by reason of short seasons, or any other occurrence, the crop 
is diminished 200,000 or 300,000 bales, the balance producing more in the 
market of the world than could otherwise have been obtained for the whole. 
No better evidence need be desired that there exists some error in the dis- 
tribution. 

Over-production cannot exist, but under-consumption may and does exist 
The more that is produced, the more there is to be consumed ; and as every 
man is a consumer in the exact ratio of his production, the more he can 
produce the better it will be for himself and his neighbour, unless there 
exist some disturbing cause, preventing the various persons desiring to con- 
sume from producing what is needed to enable them to effect their exchanges 
with the planter, to the extent that is necessary to their comfort. 

In examining into the movements of the cotton trade of the world, I may 
sometimes have occasion to refer to facts already given; and if 1 prefer to 
re-state them, it is because, from the great importance of a proper understand- 
ing of the subject, I deem it best to collect all the. facts necessary to that 
end under one head. 

The two great cotton-producers of the world are India and the United 
States. The former has long exported to distant markets food and cotton, 
indigo and saltpetre, bulky articles, the freight and charges upon which absorb 
nearly the whole product, and, as a necessary consequence, the condition of 
the people has steadily deteriorated. The difficulty of obtaining food has 
steadily increased as her manufactures have declined, and repeated famines 
and pestilences have swept off millions, thus diminishing the power of com- 
bination ; and she now therefore exports men to occupy the places recently oc- 
cupied by the slaves of Jamaica, Guiana, Demarara, and other of the West 
India colonies. With each such step, the cotton culture recedes from the low 
and rich lands towards the higher and poorer ones, and the condition of the 
cultivator deteriorates, for with each a larger proportion of his product is 
swallowed up in the cost of transportation. 

In the early part of the present century, the manufacturers of India sup- 
plied cotton goods to a large portion of the world. England had then, how- 
ever, invented machinery for its production, and to secure herself in its ex- 
clusive use she had prohibited its export, as well as that of artisans, and thus 
she compelled the cotton to come to the loom, instead of permitting the loom 
to go to the cotton. By degrees she cut off the foreign market of the manu- 
facturer, but his home market still remained to him, so long as the Company 
retained the exclusive control of the trade. In 1821, the last year of the 
monopoly, the export from England to India was but 5,000.000 of yards, 
and 4.000,000 of pounds of yarn. In 1832, it had reached 60,000.000. In 
the first half of last year 'it was 110,000,000 of yards, and 10,000,000 
of pounds of yarn. Large as are these figures, the)'- require but little more 
than 100,000 bales for their production, and would make a consumption of 
perhaps 220,000 bales per annum, to take the place of that which has 



104 



THE HARMONY OF INTERESTS. 



ceased to be raised. With every step in the increase of importation, 
production has diminished. The culture and the manufacture both have 
disappeared from the rich land^s of Bengal. The fields formerly occupied 
by this most useful plant have relapsed into jungle, and if we now desire to 
find the poor cotton planter we must seek him among the hills, where he 
obtains small crops in return for much labour, and then spends months 
in the work of transportation to the Ganges, where his miserable product is 
shipped to Calcutta on its way to England, to return to him at the close 
perhaps of the second year, giving him a few yards of poor cloth, a com- 
bination of cotton and flour, in return for the cultivation of an acre of land.* 
Under this system the value of labour diminishes steadily and regularly, 
and with it the quantity and quality of the cotton produced,! yet Englishmen 
are accustomed to regard the low price of labour as one of the elements of 
cheap production, and to look to it as affording good reason to hope for large 
supplies in future. Thus Mr. Porter informs us that : — 

" In the level plains of Candeish, and in many other parts of Hindostan, cotton wool, 
freed from the seed, could be sold with a profit to the cultivators, at one penny per 
pound, a cost which is trebled or quadrupled by the expense of conveyance to the ports 
of shipment." — Porter s Progress of the Nation. 

The price which remains to the cultivator is one penny per pound, but 
where "the profit" is to be found when the whole wages consist in an in- 
sufficient supply of the poorest food and clothing, followed by famine and 
pestilence in every case of failure of crops, it is difficult to imagine. Such, 
however, is the usual mode of treating this subject in England.^ The more 



* The produce of the great cotton-growing districts on the Nerbudda is carried on oxen, 
each taking one hundred and sixty pounds, at the extreme rate, in fair weather, of seven 
miles a day. The distance to Mirzapore, on the Ganges, is five hundred miles, and the 
cost is two and a half pence, or five cents, per pound.' Thence it goes to Calcutta, a dis- 
tance of eight hundred miles, by water, unaided, I believe, by steam. From another 
portion of the cotton-growing districts, in the Deccan, the transport occupies a continuous 
journey of two months, and in the rainy season the road is impassable and the traffic of 
the country is at a stand. In the absence of even a defined road, the carriers, with their pack 
cattle, are compelled to travel by daylight to prevent the loss of their bullocks in the 
jungles through which they have to pass, and this under a burning sun of from one hun- 
dred to one hundred and forty degrees. If the horde, sometimes amounting to a thousand, 
is overtaken by rain, the cotton, saturated with moisture, becomes heavy, and the black 
clayey soil, through which lies the whole line of road, sinks under the feet of a man above the 
ankle, and under that of a laden ox to the knees: and in this predicament the cargo lies 
sometimes for weeks on the ground, and the merchant is ruined! "Black clayey soils,'' 
rich and fertile, are here superabundant, but the poor wretch who raises the cotton must 
cultivate the high lands that require neither clearing nor drainage, and his masters take 
half the product of their poor soils while refusing even to make a road through the rich 
ones: yet forcing him to send his cotton to market to be exchanged for cotton cloth 
manufactured thousands of miles distant. A system better calculated to compel men to 
continue cultivating the poorest soils, by aid of sticks, could not be devised. 

■f- Import of cotton from India into England : — 

1844 88,000,000 lbs. 

1845 58,000,000 « 

1846 34,000,000 " 

Total export of all India to all parts of the world : — 

1835- 36 1.305,000 cwts. 

1836- 37 1.557,000 « 

1844- 45 1,623,000 « 

1845- 46 1,328.000 « 

1846, 8 months .... 600,000 « 

t A series of popular lectures on the cotton manufacture has recently been delivered 
in London, by Mr. Warren, of Manchester. In his first lecture he stated that should the 



THE HARMONY OF INTERESTS. 



105 



unproductive labour can be made the lower will be its price, the more con- 
fident will be the hope of using it to advantage, and the larger will be the sums 
expended in an effort that must prove for ever vain, while the people shall con- 
tinue to be prevented from consuming on the land the products of the land.* 

The deterioration of quality is due to the recession of cultivation from the 
lower and richer lands; and that recession is a consequence of the system 
that has ruined the manufacturers of India, and destroyed the power of 
combination of action. We know the superiority of the sea-island cotton. 
In Demarara, cotton plantations have always succeeded better on the sea- 
coast than in the interior. So was it in India. Salt manure is deemed to 
be of absolute necessity if superior quality be desired, as it gives a staple at 
once strong and silky. Such being the case, it is useless to attempt im- 
provement, when day by day the cultivation recedes from the neighbour- 
hood of the sea, producing in England a strong desire for the making of 
railroads by which it may be enabled to make its way from the hills without 
costing more labour for its transportation than had been required for its pro- 
duction. Every such effort must prove a failure. Free trade with England 
drove'it to the' hills. Freer trade will drive it to hills yet more distant. 
In some cases it is thought that if the poor people could be provided Avith 
carts, they could extend the culture with advantage, but the use of such 
vehicles supposes the previous possession of something like laid-out roads, 
and those are luxuries with which most of India is yet unprovided. 

Like the people of India, those of the Southern States of the Union have, 
thus far, had a bulky outward trade, that had, of course, to bear all the ex- 
penses of the voyage out and home. For a time, this prospered. India was 
distant from the machinery of conversion and Carolina was near, and while 
it still continued necessary to resort to the former for supplies, the price of 
that raised in the latter was the price in India, plus the difference of 
transportation. England was a sort of home market in which the planter 
obtained twenty or thirty cents per pound. By degrees, however, the near 
supply rose above the near demand, and it became necessary to seek for 



manufacturing population of that country increase during the next ten years in the ratio 
in which it has done during the last, it will become necessary, in order to employ them, to 
secure a permanent and cheap supply of cotton. This can be done, he thinks, by culti- 
vating it in British India, where, on the authority of Major-general Briggs, Sir Charles 
Forbes, and others, there can be produced a supply sufficient for the wants of the entire 
world, equal in quality to the article supplied from New Orleans, and cheaper than it by 
one-half. He states the wages of American slave labour to be equal to about Is. 6d. per 
day, while that of the free Hindoo is only about two pence. The advantages to be derived 
from such a course, he stated to be the certainty of a good and adequate supply at a cheap 
rate, the consolidation of our Indian possessions by the means of commerce, and the eman- 
cipation of the American slaves, by rendering their labour profitless to the owners. 

* The " London Chronicle," of a late date, has an article showing that the efforts which 
have been put forth during the last few years to make India a cotton-growing country 
that might rival the United States have entirely failed. It notices the failure and aban- 
donment of the experiments in cotton cultivation that have been carried on, under Dr. 
Wight's superintendence, at Madras. This enterprise, which had for its object the pro- 
duction of an article less palpably inferior to the cotton of America than the present badly- 
picked and indifferent Indian commodity, was zealously, and even lavishly, supported by 
the local government ; but the late failure of a similar experiment in Bengal, after an 
outlay of about £100,000. had already given fair warning of the probable issue of Dr. 
Wight's efforts in the sister presidency, and with its abandonment would seem to settle 
the question that India will not again become, as it once was. a great cotton-growing 
country. In 1796 America did not export a single pound. In 1834 she exported as much 
as all the rest of the world put together. And in 1846, out of 467,8C'6,274 l^s. imported 
into this country, 401,949,893 lbs. came from the United States, while only 34.556.143 
were supplied by the East Indies and Ceylon ! The total value supplied from India in, 
1845 did not exceed £600,000. 14 



106 



THE HARMONY OF INTERESTS. 



markets for cloth and yarn in India and China, in which the price realized 
by the producer could not exceed that at which it could there be sold, minus 
the difference of transportation. The necessary effect of this was to diminish 
the productiveness of Indian labour, and the power to consume cotton, and of 
course to increase the quantity to be forced upon the world, and with every 
step in course of this operation, there has been increased competition on the 
part of the American grower ; the result of which is, that the Indian pro- 
ducer is ruined, and the American one is saved from ruin only by destructive 
operations of nature, frosts, freshets, and crevasses, by aid of which the 
supply is retained within the limits of demand. 

The average consumption of this country is not less than thirteen, and is, 
most probably, fifteen pounds per head ; and it is less, by at least one-half, 
than it would be but for the heavy cost, in labour, to the consumer. The 
average consumption of the world, outside of the Union, is little more than 
one pound per head, or about one-thirtieth of what it ought to be ; and 
yet cotton has become almost the weed of the world, and men are every- 
where desiring to substitute in its place something that could be better grown 
elsewhere. On the high lands they substitute wheat, which would grow 
better farther north. On the low lands they raise sugar, which would be 
much more productive farther south. Here are serious discords, and it is 
important that we trace the cause of their existence, with a view to provide a 
remedy for a state of things so unnatural. 

With a view that we may do so, I give the following 



SUMMARY STATEMENT OF CROPS, CONSUMPTION, &c, OF AMERICAN COTTON, FOR TWELVE 

YEARS* 

















Total am't. 










Crops, as 


Consumed 


Stock at 


Imports of American 


of Ameri- 


Stock of 


Average 






shown by 


in the 


the ports 


Cotton into Great 


can Cotton 


Am. Cot- 


quot. of 






receipts the 


U. States, 


end of the 


Britain, from 1st Jan. 


consumed 


ton in Gt. 


Uplands 






31st Aug. 


year end'g 


year 


to 31st Dec. 


in Great 


Britain, 


in Liver- 






31st Aug. 


31st Aug. 






Britain. 


Dec. 31. 


pool. 


1836- 


-7 


1,422,930 


222,540 


109,036 


1837 


844,812 


778,492 


158,100 


7 d. 


1837- 


-8 


1,801,497 


246,063 


68,961 


1838 


1,124,800 
814,500 


913,328 


316,100 


7 


1838- 


-9 


1,360,532 


276,018 


69,963 


1839 


813,4881242,300 


n 


1839- 


-40 


2,177,835 


295,193 


78,780 


1840 


1,237,500 


1,018,784 


403,000 


6 


1840—1 


1,631,945 


297,288 


72,479 


1841 


902,500 


809,900 
893,256 


344,600 


H 


1841- 


-2 


1,684,211 


267,850 


31,807 


1842 


1,013,400 


373,400 




1842- 


-3 


2,379,460 


325,129 


94,486 


1843 


1,396,800 


1,110,046 


593,200 


4f 


1843—4 


2,030,409 


348,744 


159,772 


1844 


1,246,900 


1,126,008 


654,900 




1844- 


-5 


2,415,448 


389,006 


98,420 


1845 


1,499,600 


1,289,808 
1,280,096 


809,100 


m 


1845- 


-6 


2,100,537 


422,597 


107,122 


1846 


937,000 


397,800 


H 


1846- 


-7 


1,778,651 


427,967 


214,837 


1847 


874,100 


867,516 
1,189,500 


286,200 
348,300 


6| 


1847- 


-8 


2,347,634 


531,772 


171,468 


1848 


1,375,400 


4| 



The stock in our own ports, Aug. 31, 1836, appears to have been, 109,000 

That of American cotton in English ports, - 90, 000 J 

The crops of the twelve years, from 1836-7 to 1847-8, were 23,571,000 
To which must be added, for the additional consumption in the 

South and West, in the last two years, - 125,000 

Total, - - ^,805,000 
The stock in port, and in G. B. at the close of the season 1847-8, 520,000 

Consumption of twelve years, - - 23,375,000 
Thus divided— English, .... 12,100,000 

American, - - 4,052,000 
Additional, as above, 125,000 

4,177,000 

Leaving for the rest of the world, 7,098,000 

23,375,000 

* From the New York Courier and Inquirer. 

■f- Duty, JLd. per lb. taken off by Act of Parliament, passed 8th May, 1845. 
$ The imports of 1837 exceeded the consumption by 66,000 bales, and the stock, at the 
close of the year, was 158,000, from which, if we deduct the 66,000, there remain 92,000. 



THE HARMONY OF INTERESTS. 



107 



Average of the first Two Years. Total Average. Average of last Two Years 

English, . . 846,000 . 1,008,000 . 1,028,000 

American, . 235,000 . 348,000 . 542,000 

Allother, . . 444,000 . 591,000 . 548,000* 



1,525,000 1,947,000 2,118,000 

From this we see that the average consumption of the twelve years ex- 
ceeded that of the first two, in the following ratio : — 

English, 18 per cent. 

American, 50 " " 

Allother, .... 22 « « 

But when we compare the first and last two years of the period, we ob- 
tain the following results : — 

English, 21 per cent. 

American, 125 " " 

All other, .... 23 " " 

The portion of Europe that has most fully adopted the system of projec- 
tion being the Zoll-verein^ it will be useful to compare the growth in their 
consumption with that of Great Britain and Ireland. 

The imports of raw cotton into Prussia before the formation of the Tariff- 
league or Zoll-verein, remained from 1827 to 1835 stationary at 44,000 
cwts. per annum.J That of yarn increased from 1823 to 1835, from 61,000 
to 115,000 cwts. The total increase of twelve years, was from 105 to 
159,000 cwts., or from 30 to 45,000 bales. The following shows the growth 
from that period in the territories of the confederation : — 

Average from 
1836. 1S37 to 1841. 1S43. 1845. 

Raw cotton, quintals . . 152,364 200,093 306,731 443,887 

Cotton twist and wadding, do. . 244,869 351,884 475,564 574,303 



397,233 551,977 782,295 1,018,190 
The quantity has more than doubled, and the home consumption has 
increased about 75 per cent.§ in a period during most part of which 
our own consumption had remained stationary. || The quantity of twist 
and wadding imported from Great Britain had increased 135 per cent, 
in a shorter period than was required in the latter for an increase in" 
her home and foreign consumption of only 21 per cent. The power to 
import thus grew with the power of production. It is obvious that the con- 
sumption tends, and must tend, to increase most rapidly where there is 
the least intervention between the producer and the consumer, and equally 
so that the English demand, based upon the principle of intervention between 
the two, and consequent increase of cost to the consumer, cannot be largely 
and permanently increased. That of 1846-7 was less than that of 1837-8, 
and the difference between that of 1839-40 and that of 1847-8, great as 
was the fall of prices, was but 171,000 bales. 

The great increase in the consumption of the Zoll-verein is due to pro- 



* This period embraces a season of war and convulsion over the whole continent, 
f De Bow's Commercial Review, Vol. V. p. 267. 

* Merchants' Magazine, Vol. XIII. p. 286. § Ibid. 

|j The increase of consumption after the formation of the Union was very rapid. As 
early as 1838, it was said, that t; The cotton manufacture of Saxony had already become 
of twice the extent it had reached before the Union." — Porter's Progress of the Nation, 
Vol. II. p. 198. The quantity of cotton hosiery made in Saxony has increased immensely 
of late, and from its cheapness has not only secured the monopoly of the markets of the 
Union, but has also been shipped largely to the United States. 



108 



THE HARMONY OF INTERESTS. 



tection. If, now, from, the additional British consumption we deduct ttie 
additional yarn sent to this one protected country, we shall be enabled to 
see how trivial is the power of increase in the unprotected world. The 
account will then stand thus: — 



English 

Zoll-verein (1836) 

American 

All other 



First two years. 
846,000 
100,000 
235,000 
344,000 



Last two years. 
958,000* 
230,000* 
542,000 
378,000 



Ratio of increase. 

13 per cent. 
130 « 
125 » 

10 « 



In the one case England took 846,000 at Id., total . $53,000,000 

In the other, 958,000 at hid 48,000,000 

In both, the price was fixed in her own ports, and regulated 
by her own power of purchase. Had our home consumption 
absorbed 200,000 additional bales, thus reducing the supply to 
750,000, the price would have been 8d. and the amount would 

have been $54,000,000 

and the product of the whole crop would have been almost doubled. 

The consequence of this incapacity of extending her foreign market is, 
of course, the accumulation of large quantities in English ports, accompanied 
by a fall of prices, by aid of which the English consumer obtains a larger 
quantity for the labour that he can afford to give in exchange for the mate- 
rials of clothing, and that tends to decrease as his labour becomes more 
unproductive, and as the disposition to "fly from ills they know" increases. 
This will be seen by the following table: — 

British and Irish consumption. 



Crop. Bales. 


Average price. 


Quantity. 


Value. 


1839—1,368,000 ' 


14-5 cents. 


73,000,000 pounds. 


$10,585,000 


1840—2,180,000 


8-6 " 


172,000,000 » 


14,620,000 


1841—1,034,000 


10-3 " 


97,000,000 < ! 


9,991,000 


1842—1,684,000 


8-2 " 


97,000,000 


7,954,000 


1843—2,388,000 


6 


120,000,000 « 


7,200,000 


1844—2,030,000 


8-1 « 


124,000,000 " 


10,116,000 


1845—2,100,000 


5-9 " 


164,000,000 " 


9,696,000 


1846—2,101,000 


7-3 " 


147,000,000 " 


10,731,000 


1847—1,778,000 


10-1 " 


77,000,000 " 


7,777,000 


1848—2,347,000 


7 


130,000,000 " 


9,100,000 


1,961,000 


8-6 « 


. 1,201,000,000 " 


9,777,000 



The total home consumption by the 27,500,000 composing the population 
of the United Kingdom, was thus but 1,200,000,000 pounds, or an average 
of 120,000,000 per annum, giving 4^ pounds to each individual, supplied 
at a cost so low as to ruin the producer. The average of the first two years 
was 122,500,000, while that of the last two years was but 102,500,000, not- 
withstanding an increase of population that should have brought it up to 
140,000,000. 

From this statement it appears clearly that the power of the people of 
Great Britain and Ireland, to be customers to the cotton planters of the world, 
cannot go much beyond $10,000,000; and that, instead of increasing with 
the population, it tends decidedly to diminish. The reason of this appears 
to me obvious. The people of England are perpetually engaged in the 
effort to sell the products of their labour in distant markets, in competition with 
low-priced labour, and therefore at the lowest price; receiving payment in 
food and other articles of consumption produced in distant markets, which 
come to them burdened with enormous cost of transportation, and therefore 



* I have deducted and added only 70.000 bales, supposing the last two years' export 
not to have been as great as that of 1845. 



THE HARMONY OF INTERESTS. 



109 



obtained at the cost of much labour. The natural growth of production 
elsewhere tends to increase the supply of raw materials, but the power to pay 
for them does not increase, because the labour of British subjects, home and 
colonial, instead of becoming more productive of commodities to be given in 
exchange, is becoming less so from month to month and from year to year, 
and yet into that constantly diminishing market are thrown all the surplus 
products of the world, that the price of the whole product may there be 
fixed. The effect of this is to throw on the planters the loss that should 
belong to themselves, and thus enable them to supply themselves at the 
lowest price ; whereas, whenever the cotton planter shall cease to be depend- 
ent upon them for his market, they will again, as formerly, be obliged to 
buy at the highest price. The product of British labour, measured in the arti- 
cle of first necessity, food, is small, and the surplus remaining, to be applied to 
the purchase of clothing, is therefore very small indeed. They are in- 
cessantly engaged in supplying low-priced, and often worthless clothing 
to the world, and are therefore unable to clothe themselves. 

That the tendency is downward, seems scarcely to admit of a doubt. A 
few years since, by a great effort, the poor-rates of England were reduced 
to less than .£4,000,000. Thev have since risen gradually, and those 
of 1848 were £7,817,000, or $38,000,000. Every ninth person is a 
pauper. In Scotland, the destitution of a large portion of the population is 
frightful. The people of the Northern and Western Highlands are in a 
stale of pauperism; and Glasgow and its vicinity present a scene cf wretch- 
edness scarcely, if at all, to be exceeded in the world. Ireland is exhausted. 
There being no separate accounts of the imports into that kingdom, jt is not 
possible to ascertain the present consumption of cotton, but the condition of 
the people is now far lower than at the dates of the following returns: — 

The whole import of cotton into Ireland from all parts of the world, in the 
twenty years from 1802 to 1821 both inclusive, amounted to 538,542 hun- 
dred weights, or about 150,000 bales, being an average of 7500 bales per 
annum, and the whole import of cotton yarn, to 19,995,350 pounds, or about 
1,000,000 pounds per annum, the product of about 4000 bales, making a 
total of 11,500 bales.* The amount of cloth imported is not given. 

In 1825, the year of great expansion everywhere, with an export to 
Great Britain of agricultural products amounting to almost $35,000,000, we 
find the import of cotton-wool to have been 4,065,930 pounds, and the im- 
port of cotton cloth to have been 4,996,885 yards, making in the whole 
about 6,000,000 pounds, or about 18,000 bales of cotton, in all its forms, re- 
quired for the supply of almost 8,000,000 people ; being about three-quarters 
of a pound per head. 

In subsequent years, no information can be obtained, owing to changes in 
the mode of keeping the custom-house accounts ; but in a general report on 
the state of the trade of Ireland, made by a committee whose object would 
not have been promoted by under-estimates, it is stajted that the import of 
cotton-cloth into that kingdom was, in 1835, 14,172,000 yards, being equal 
to about 4,000,000 pounds of cotton, or half a pound per head. What 
quantity of cotton- wool, or yarn, was imported at that time, cannot be ascer- 
tained, but it is elsewhere shown that some of the largest establishments for 
manufacture, of a period somewhat earlier, had disappeared, and that the 
calico printers were in a state of bankruptcy.! 

We may now look to the consumption of the colonies of Great Britain. 
In the years 1845, '46, '47, the export to them was as follows,! in millions 
of pounds :— 1845, 85 ; 1846, 87 ; 1847, 67. Of this, however, large 

* Ireland before and since the Union, by R. Montgomery Martin, pages 56 to 60. j- Ibid 

* Merchants' Magazine, Vol. XIX. 600. 



110 



THE HARMONY OF INTERESTS. 



quantities went to Gibraltar, Malta, Jamaica, and other places, to be smuggled 
into Spain, Mexico, and other countries, and the consumption of the colonies 
of themselves could not have exceeded 70,000,000, or about 170,000 bales, 
for more than 100,000,000 of inhabitants. During this time, the average 
price was a fraction over 7 cents, and it follows that $5,000,000 is the 
maximum amount of trade maintained, through the medium of England, by 
the planting States of the Union, with a large portion of the people of the 
world, although producing two-thirds of the whole quantity of this necessary 
commodity for the use of the world. 

Taking the total consumption of the United Kingdom and the colonies, 
we now have the following quantities : — 

1845. 1846. 1847. 

Millions of pounds 239 . 234 144 

Need any better evidence be desired of the poverty inflicted by the sys- 
tem upon all the people subject to it, than the fact that an increase of price 
equal to one cent per yard reduces the consumption almost one-half? 

Let this be compared with the growth of consumption in the protected 
markets of Germany and the United States, and it will be seen how steady 
is the protected, or real free -trade, system, compared with the perpetual 
change of the monopoly one. How great, too, the difference in the con- 
sumption per head! 

While England and all her vast possessions consumed but 144,000,000 
the consumption of the Zoll-verein (population 25,000,000) 
had grown in nine years from 45,000,000 to . . . 115,000,000 
and that of the Union was 243,000,000 

We have seen how slow has been the growth of the English demand, and 
it may now be w r ell to see the wasteful and exhausting process by which even 
this has been obtained. "The extremely low price of cotton," say Messrs. 
Rathbone, Brothers & Co.,* " has encouraged the manufacture of a very in- 
ferior class of goods, which require a great weight of cotton compared to the 
labour expended on them, and of which the make ceases entirely when cotton 
is moderately high. The demand for very coarse yarn," they continue, " is 
always large at very cheap prices, but in the year just closed it has ex- 
ceeded all precedent,! particularly for export, chiefly to the Levant, and in 
some instances to accelerate its make, it has not passed through all the 
usual processes. It is on the consumption of cotton for these classes of 
goods," they add, "that even a moderate advance in prices is apt so imme- 
diately to tell." The cotton thus forced into the Levant goes to the same 
countries that before were supplied from India, and thus is the poor Hindoo 
deprived of another portion of his market, the necessary consequence of 
which must be a further depression of prices, and increased inability to con- 
tinue the work of production. The decline in the trade of Western India 
is remarkable, and is probably the result of this flooding of the Asiatic 
markets with half-made cotton goods.J 

* Circular, January 3d, 1849. 

-f- The prices of ordinary cotton ranging during a large portion of the year, from 
Zd. to 4rf. 

± The average imports of Bombay for the five years ending December 31, 1846, were 
63,000,000 of rupees, while those of 1846 were only 52,000,000. The exports were as 
follows : — 

5 years ending December 31, 1846. 1846. 



Cotton, 


bales 


380,987 


257,743 


Wool, 


lbs. 


. 3,421,976 


. 4,626,470 


Coffee, 


ibs. 


3,140,821 


. 1,529,900 


Pepper 


cwts. 


47,260 


46,182 


Indigo, 


lbs. 


135,833 


55,928 


Ivory 


cwts. 


5,764 


6 109 



THE HARMONY OF INTERESTS. 



Ill 



It has been seen how large' was the export to India in the first six months 
of the year, and now we see by the newspapers of the day what are the 
consequences. Low as was the price of cotton, the speculation has not 
answered. The markets are glutted, and the prices are unremunerative. 
"Great caution," it is said, " must now be exercised, or the exporting houses 
will suffer exceedingly."* The small rise in price has already caused 
:nany mills to commence working short-time, and the operatives in them are 
thus deprived of the power to purchase clothing. It is the most gambling, 
and most extraordinary system, and the most destructive to the interests of 
the agricultural population of the world that has ever been devised. The 
feverand the chill succeed each other with such rapidity that we are 
scarcely advised of the arrival of the one, before we see indications of the 
approach of the other. The cause of this difficulty of extending the sale 
of cotton in distant markets is to be found in the fact that the labour-cost of 
cloth so obtained is great. ' We have seen that the extension of the manu- 
facture in this country for a few years following the passage of the tariff of 
1828 was rapid, and that it then became almost stationary under the Com- 
promise, yet the import not only did not increase but decreased until it 
reached the lowest point in the period of 1842-43. The labour-cost of 
clothing was steadily increasing, but as the tariff of 1842 came into operation 
the labour-cost diminished, and there arose a power to pay for finer cloths 
from abroad, and thus the import and manufacture increased together. If 
we desire to see the operation of this, we need only take a single farmer 
of Tennessee or Kentucky, who obtains 30 or 40 bushels of corn in return 
for the labour bestowed on an acre of land, and is happy to sell it at 20 cents 
per bushel,! when the price in Liverpool is 75 or 80 cents. Thirty-five 
bushels yield here $7, which is about the cost of 70 yards of tolerable cotton- 
cloth, plain and printed, when received on his farm. To produce those 70 
yards would require 20 pounds of cotton, or one-twentieth of the product 
of a well-cultivated acre. To convert those pounds into yards of cloth 
requires far less than half the capital, and half the labour required for their 
original production. Taking, however, the conversion at one half, and adding 
that proportion to the number of pounds, we obtain the equivalent of 30 
pounds of raw cotton as the return for 35 bushels of corn, and yet that corn 
sells, at the place of consumption, for as much as would purchase almost a bale 
of cotton. It is obvious that though the money-price of the cloth is low, the 
labour-price is high, and it is by the latter that the power of consumption is 
measured. The cioth, too, is worthless. As far back as 1832, the quantity of 
flour required for the use of the cotton factories of England was stated at forty- 
two millions of pounds, t or almost as much as the weight of 100,000 bales 
of cotton, all of which is traded off as cotton, to the poor consumers of dis- 
tant lands, who are thus defrauded and impoverished. 

Bad as is even this, it is far from all the loss that is sustained. The corn 
is sent from the land, and the farmer loses the refuse. The land is impo- 
verished, and its occupant is compelled to fly to other lands, to be again im- 
poverished. The loss from this source alone is far more than the value of 
all the imports into the Union, of every description,from all the manufactur- 
ing nations of the world. The apparently cheap clothing is very dear. It 
is obtained at the cost of much labour, and of little value when obtained. 

* Morning Herald, November. 

f " Tennessee grows more corn than any State of the Union. A few months since we 
took fhe liberty to ask a farmer from Tennessee who had a drove of hogs in our streets, 
the price of corn in the region from whence he came. He replied that it was worth ten 
cents, and wheat fifty cents a bushel.'' — Augusta Chronicle, May, 1849. 

i MeCuUoch's Commercial Dictionary, article Cotton. 



112 



THE HARMONY OF INTERESTS. 



What.is true of Tennessee and India, is equally so of the othei parts of the 
world that are compelled to depend on England for supplies o\ cotton cloth. 
The poor Russian obtains less than a pound of cotton for a bushel of wheat, 
and thus he gives ten days' labour for one; whereas, if he could have 
cotton converted on the spot, by the man who ate his food, he would obtain 
day's labour for day's labour. So is it with the German, the South Ameri- 
can, the Mexican, the Italian, the Spaniard, and the Turk. The system tends 
to prevent concentration and combination of action, and to diminish the value 
of labour throughout the world, and it is because of this, that almost all na- 
tions are endeavouring to shut out the manufactures of Great Britain. 
Everywhere, however, they are met by the smuggler, now regarded by the 
highest authorities of Great Britain as the greatest of reformers. Gibraltar 
is maintained for the purpose of smuggling goods into Spain. Exhausted Por- 
tugal receives millions of pounds of cotton goods, likewise to be smugglea 
into Spain; and thus is that unfortunate country. kept in a state of poverty, 
because the people of England are pleased to believe that it is profitable to 
buy cloth produced abroad, while the labourer at home is idle for w r ant of 
demand for his labour, and the food perishes on the ground for want of 
mouths to eat or roads to transport it. 

If the system tends to the exhaustion of the people who have to buy cot- 
ton at so high a price, not less does it tend to the exhaustion of those who 
have to produce it, and who are compelled to sell at whatever price the peo- 
ple of England think proper to fix upon it. Why that is so, may, perhaps, 
be ascertained by an examination of the following table : — 

Gross proceeds of sales of American 
cotton in Liverpool, from which 
are to be deducted freights, com- 







Stock in Liverpool, Dec. 31. 




missions, &c. &c. Weig 




Crop. 


Bales. 


Price. 


estimated at 450 pound 


1837- 


-1,422,000 


158,000 


Id. 


. $49, 000, 000 


1838- 


-1,801,000 


316,000 


7 


57,000,000 


1839- 


-1,360,000 


242,000 


n 


57,000,000 


1840- 


-2,177,000 


403,000 


6 


55,000,000 


1841- 


-1,631,000 


344,000 


6* 


45,000,000 


1842- 


-1,684,000 


373,000 


5| 


47,000,000 


1843- 


-2,379,000 


593,000 


4f 


47,000,000 


1844- 


-2,030,000 


654,000 


H 


49,000,000 


1845- 


-2,415,000 


808,000 


4f 


51,000,000 


1846- 


-2,100,000 


597,000 


H 


56,000,000 


1847- 


-1,778,000 
-2,347,000 


286,000 


H 


51,000,000 


1848- 


348,000 




45,000,000 



The quotations of the latter portion of the last year were below the aver ■ 
age, being about 4d., and about that point they remained for several 
months, until the chief portion of the crop had been shipped. The un- 
favourable prospects for the new crop tended to prevent a further fall, but it 
is impossible to tell what would have been the price had that of the pre- 
sent year increased in its proper ratio to the population engaged in its pro- 
duction. It would certainly have fallen much below even fourpence. An 
examination of this table will, I think, enable us to understand the cause of 
the present extraordinary state of things. A large portion of the crop of 
the present year has been destroyed by frosts, freshets, &c, and that fact, 
instead of bringing with it distress and ruin, has brought with it increased 
activity and life among planters, and increased power to consume cloth, 
sugar, coffee, &c. Why is it so ? The answer can, I think, readily be 
given. 

The amount that can be collected by Great Britain, in pa)^ment for Ameri- 
can cotton, consumed at home and abroad, and for freights, commissions, &c, 
appears to be limited to somewhere between $45,000,000 and $57,000,000. 



THE HARMONY OF INTERESTS. 



113 



with an obvious tendency to diminution. Of the crop of the past four years, 
the quantity consumed among ourselves, and exported by us directly to foreign 
ports, has not varied materially from 1,000,000, The balance has gone to 
Enolaiid, who has $57,000,000 with which to pay for 900,000 bales, say $(53 
a bale. The crop, however, reaches 2,400,000 bales, and we send her 
1,400,000; all of which have to be compressed within a smaller sum than 
57,000,000, for now there are large expenses for storage, interest, risk, &c, 
and the amount falls to 50,000,000, leaving the planter but $36 a bale, out 
of which he has to pay the high freights consequent upon large crops, 
and upon a large number of bales, instead of that moderate freight that would 
have accompanied small ones, and upon a small number of bales. The 
price obtained in England fixes that of the crop, and the result is as fol- 
lows : — 

1,900,000 bales at $63 $120,000,000 

Less low freights, at home and abroad, upon a small 
quantity. 

2,400,000 bales at $36 86,000,000 

Less high freights, at home and abroad, up(*i a large 
quantity. 

It is obvious that it would have been far better that the 500,000 
bales should have been burned, or destroyed by frost before being picked. 
The crop of 1844 was 812,000,000 pounds, and the product was esti- 
mated at $65,772,000 

In 1845, it rose to 958,000,000, and the product fell to . 56,000,000 

In 1847, it fell to 71 1,000,000, worth 72,000,000 

In 1848, it rose to 1,100,000,000, and until the occurrence of 
frosts and freshets, the prospect was that it would not aver- 
age at New Orleans more than 5£ cents, or . . 60,000,000 

The gradual but steady subjugation of the planters to the system may be- 
seen from the following facts : From 1830 to 1835, the price of cotton here 
was about eleven cents, which we may suppose to be about what it would 
yield in England, free of freight and charges. In those years our average 
export was about 320,000,000, yielding about $35,000,000, and the average 
price of cotton cloth, per piece of 24 yards, weighing 5 lbs. 12 oz., was 
7s. 10r/., ($1-88,) and that of iron £6, 10*., ($31-20.) Our exports would' 
therefore have produced us, delivered in Liverpool, 18,500,000 pieces of 
cloth, or about 1,100,000 tons of iron. In 1845 and '46, the home consumption^ 
of the people of England was almost the same quantity, say 311,000,000 
pounds, and the average price here was 6£ cents, making the product 
$20,000,000. The price of cloth then was 6s. 6ftf., ($1-57|,) and that- of" 
iron about £\0, ($48.) and the result was, that we could have, for nearly the 
same quantity of cotton, about 12,500,000 pieces of cloth, or about 420,000- 
tons of iron, delivered in Liverpool. Dividing the return between the two * 
commodities, it stands thus: — 

Average from 1830 to 1835. 1S45-6. Lbas.- 

Cloth, pieces, - 9,250,000 . 6,250,000 . 3,000,000 

And iron, tons, - 550,000 . 210,000 . ' £40,000 

The labour required for converting cotton into cloth had been greatly, 
diminished, and yet the proportion retained by the manufacturers was-greatly 
increased, as will now be shown: — 

Weight of Cotton given Retained by the - 
Weight of Cotton used. to the planters. manufacturers. 

1830 to 1835, - - 320,000,000 - 110,000,000 - 210,000,000 
1845 and 1846, - - 311,000,000 - 74,000,000 - 237,000,000- 

15 



114 



THE HARMONY OF INTERESTS. 



In the first period, the planter would have had 34 per cent, of his cotton 
returned to him in the form of cloth, but in the second only 24 per cent. 
The grist miller gives the farmer from year to year a larger proportion 
of the product of his grain, and thus the latter has all the profit of every 
improvement. The cotton miller gives the planter from year to year a 
smaller portion of the cloth produced. The one miller comes daily nearer to 
the producer. The other goes daily farther from him, for with the increased 
product the cost of transportation is increased. 

We may now r inquire into the cause of the accumulation of stock in the 
English market, and if that can be ascertained, we shall be able to see why 
it is that cotton has fallen so ruinously low. 

Of the crop of 1828-29, our own consumption was . . 118,000 

Of those of 1832-33 and 1833-34, the average was . . 195,000 

Of that of 1834-35, it was . . . ~ . . . 216,000 
having almost doubled in six years, and with a tendency to an increase in 
the ratio of advance ; and this increase was attended by no diminution in our 
consumption of foreign cloth. 

Of the crop of 1841-42, we consumed only . . . 268,000 
with a great diminution in the consumption of foreign cloth. 

Of that of 1847-48, 607,000 

with a large increase in the consumption of foreign cloth, the total con- 
sumption having much more than doubled in a similar period of time. In 
the per^'d intermediate between 1835 and 1843, our consumption had been 
stationary. Had it not been interfered with by the action of the Compromise 
bill, it would certainly have doubled in that period, and probably much 
more than doubled. If, however, we assume an increase of only 12| per 
?ent. per annum, or quadruple the increase of population, the following 
vould have been the home demand: — 



1835- 6 . . 243,000 bales 

1836- 7 . . 273,000 « 

1837- 8 . . 307,000 « 

1838- 9 . . 345,000 « 



1 839- 40 

1840- 41 

1841- 42 

Total 



388,000 bales 
437,000 « 
491,000 « 



2,484,000 
1,844,000 



The actual consumption was . . . . 

Difference ... 640,000 

The loss of demand to the planter was thus more than the whole quantity 
that was left unsold when the market broke down. 

Following up the consumption to the present time at the same rate, we 
ibtain the following 1 results : — 



1846- 7 . . 883,000 bales 

1847- 8 . . 994,000 « 



1842- 3 . . 552,000 bales 

1843- 4 . . 621,000 « 

1844- 5 .' . 680,000 « 

1845- 6 . . 785,000 « 

5,550,000 

The actual consumption has been about .... 3,000,000 



1848-9 . . 1,019,090 



Difference in seven years, . . . . . 2,550,000 
Total difference, 3,190,000 

No one can doubt that the progress would have been greater than is here 
set down, and yet with no more than this, we should have used above 
3,000,000 bales that we have not used. Had we done so, the producer 
>f cotton would have fixed the price and not the buyer. Under such cir- 
cumstances would it have fallen below ten or twelve cents per pound ? 
Would it not, on the contrary, have risen to fourteen or fifteen, unless the 
crop had been much increased ? I think it would, and I feel assured that it 
will do so in a very brief period from the thorough adoption of a system 



THE HARMONY OF INTERESTS. 



115 



that will establish here such a market for labour as will enable us to con- 
sume on the land the products of the land, and my reasons for so believing 
are as follows : — 

The good cotton lands of India are now waste. To render them productive 
requires labour and capital. To induce the application of either, the labourer 
must have wages and the owner of capital must have profits. Both must 
rise in price with any increased demand for them. Such demand must 
arise when England shall find herself compelled to look to India for any 
increased supply, as she must do so soon as our home demand shall have 
risen to the extent of 1,000,000 bales per annum, as it will dc> in the next 
three years, if permitted so to do. 

It will be asked, what should we do with all this cloth? in reply, I say 
again, and I repeat it because it is essential that it be recollected — every 
man is a consumer to the whole extent of his production, whatever that, 
may be. Had<the tariff of 1828 remained unchanged, the production of coal 
in the same period would have reached 15,000,000 tons, for furnaces and 
rolling-mills would have been built throughout the country, and railroad 
bars would have been made by hundreds of thousands of tons, and treble the 
roads would have been made without producing bankruptcy. The demand 
for roads, and mills, and furnaces, and steam-engines of every description 
would have created a vast demand for labour that was wasted, and the surplus 
earnings would have gone to the purchase of clothing and other of the con- 
veniences and comforts of life, and there would have been made a market 
on the land for the products of the land, to the extent of hundreds of millions 
of dollars, enabling both farmer and planter to improve the machinery of 
production and transportation, growing rich instead of remaining poor as they 
have done. With each such step the immigration from Europe would have 
increased, and as every man would at once have become a producer, eyery 
one would have been a consumer. The Englishman would consume twelve 
pounds, where before he consumed but four, and the Irishman would con- 
sume twelve where before he consumed but one, while freights to Europe 
would be so far reduced that the price of cotton in New York woula be 
almost as high as in Liverpool. 

It will be observed that the quantity here set down for 1846-7 exceeds, 
by only one-third, that which we actually did consume. Had immigration 
continued to increase, from 1834 to the present time, at the rate at which it 
was then advancing, our population would be greater than it now is by 20 
per cent., providing for nearly the whole quantity, without an}^ allowance for 
increased consumption by the population previously existing. The whole 
of them would have needed large supplies of coffee, silk, and a thousand 
other things from abroad, for much of which we should have paid in 
cotton goods. The facility of obtaining iron would have given roads to 
the farmer and planter, and all would have had more of the proceeds of their 
labour to apply to the purchase of clothing. The planter himself, and his 
people, would now be consuming three yards where now they consume but 
one ; and the home-market would now be absorbing 1,200,000 bales, in- 
stead of a million. What then would be the price of cotton, even with a crop 
of 3,000,000 ? Would it not be $60 a bale, yielding him 180 millions in- 
stead of 80 ? I think it would. 

In 1845 and 1846, the planter supplied 311,000,000 of pounds, for which, 
delivered on the sea-board, he could have had 74,000,000 lbs. delivered in 
Liverpool, the freight and commissions, homeward, being paid by him. He 
gave 156,000,000 for 37,000,000, the charges upon which, without duty, 
would have reduced it to 30,000,000 on the plantation, and probably less. 
The 30,000,000 had, however, been twisted and woven, and the difference, 



116 



THE HARMONY OF INTERESTS. 



one hundred and twenty-six millions, was what he gave for the twisting 
and weaving of thirty millions. The average work of operatives, men and 
women, boys and girls, exceeds the conversion of 3000 pounds of cotton into 
such cloth, per annum. The planter, then, gave 126,000,000 of pounds of 
cotton for the labour of 10,000 persons, chiefly boys and girls, and he trans- 
ported 156,000,000 to market. Were he to calculate the cost of transporta- 
tion from the plantation to Nashville, or other place of shipment, he would 
find that that alone was far more than the labour he obtained in return, and 
that he had in fact given the cotton itself away, receiving for it no equivalent 
whatever. 

Had the whole 156,000,000 been converted at home into cloth, it would 
have amounted to about seven pounds additional, per head, for the people of 
the Union, and it would then have been consumed at home, for the con- 
sumption of the South would then have risen to a level with the present 
consumption of the North, and the latter would have largely increased, be- 
cause of the great demand for labour that would have existed. Had that 
been done, the price of the whole crop would have been 8d. instead of 4%d., 
and the planter would have received seven cents per pound, additional, on 
900,000,000 of pounds, or sixty-three millions of dollars — and that, large a 
sum as it is, is but a part of the benefit that w T ould have resulted from such 
a course of operation. 

It will be said that high prices would arrest consumption. If so, how im- 
portant it is to the producer to cut off the enormous charges of the host of 
persons that now intervene between himself and those who desire to con- 
sume his products. High prices, consequent upon the maintenance of the 
existing system, do arrest it, because they are a tax upon both producer and 
consumer. Such prices realized by the former, consequent upon an in- 
creased facility of exchanging with the latter, would produce a contrary 
effec-t. They would increase it : for we should obtain more from all 
the world for w T hat we had to sell, and our own consumption would in- 
crease more rapidly. The increasing emigration to this country would raise 
the value of man abroad, and those whom we now see expelling him from 
their lands, burning his house that he may not return, would then find 
themselves compelled to offer him inducements to remain. Agriculture 
would then improve and wages would rise, and the power to consume cot- 
ton, on both sides of the Atlantic, would grow, to the infinite advantage of 
'he planter. With the increased demand, he would at length find some- 
thing like certainty in place of the present gambling system under which 
he'is so often nearly ruined. How little certainty he now can have, will be 
seen by the following diagrams, which I take from the circular of Messrs. 
Rathbone, Brothers, & Co., before referred to. 

Fluctuations in the price of Cotton, in 1848. 



Jan. Feb. Mar. April. May. June. July. Aug. Sept. Oct. Nov. Dec. 




* Fair Orleans. f Middling. % Ordinary. 



THE HARMONY OF INTERESTS. 



117 



The following shows ihe variations, from 1844 to 1848, in the prices of 
cotton, twist, and cloth. 



1845. 



1846. 



1848. 




* Gray 
Shirtings 
72 Reed, 
38^ Yds. 

Cotton 5 
Fair 
'Upland. 



The highest and lowest lines show the comparative prices of yarn and cotton, the quotations being 
per. lb. on the left of the tables. The middle line shows the fluctuations of a cotton long cloth, the 
quotations being per piece, on the right of the tables. 



Here we see the price of cotton lowest when cloth is at the highest; and 
the manufacturers realizing fortunes, while the planter is being ruined. Such 
are the inevitable results of a system that forces almost all the cotton of the 
world into a market in which there is but a given amount to be exchanged 
against it, and in which the price of each pound is dependent entirely upon 
the relation which the whole mass bears to the constantly diminishing sum 
that can be spared to pay for it. It is a constantly shrinking Procrustean 
bed. While thus destroying the planter, and lessening his power to provide 
for his people, there is an unceasing abuse of him as an owner of slaves, 
and an unceasing threat to substitute theyVee labour of the wretched Hin- 
doo for that of the well-fed, w r ell-clothed, and w T ell-housed labourer of the 
South, and the lower the price of cotton, the stronger is the determination to 
keep it low. Railroads are to be made in India, that cotton may come to 
market cheaply, and cotton cloth go more freely to that country; and yet with 
every step of increase in the export of cotton goods, the poor Hindoo becomes 
more and more enslaved, and more and more the victim of famine and pes- 
tilence. 

The difference between twelve cents and eight cents per pound for cotton 
is, on an average, about one cent a yard. The consumption of Great Britain 
and Ireland is about fifteen yards per head, while the average of that of her 
colonies is about three. It is absurd to suppose that this difference could 
make any essential difference in the consumption of an article of the first 
importance, under natural circumstances; but if it could, how immense 
would be the difference in our home consumption that would result from 
the adoption of a system that would enable the farmers of Tennessee and 
Ohio to exchange produce with the planter — food for cotton — giving acre for 
acre, instead of, as now, bushels for pounds — the difference being swallowed 
up in the transit of the food and the cotton to and from Liverpool and Man- 
chester. 

The harmony of interests, throughout every part of the Union, is perfect, 
and all that is needed is, that all should understand it. What injures the 
farmer injures the planter; and vice versa, the planter cannot suffer without 
injury to the farmer. Throughout the South, planters are abandoning cotton 
and substituting wheat, and that at a moment when the European market 



118 



THE HARMONY OF INTERESTS. 



for food is to be closed against the hundreds of millions for which, as it is 
asserted, we now need a market. 

As some may doubt the existence of this harmony, I propose now to show 
how the present course of action, as relates to food, tends to destroy the 
market for cotton. 

The people of Germany and Russia, after feeding themselves, have food 
to sell. With the produce .of that food they desire to buy cloth. The 
higher the price of the food they sell, the more cloth they can buy. The 
great food market, at present, is England. If we fill that market, the price 
of food will be low, and the German can buy little cotton. If we do not, 
it may be high, and he may buy much cotton. We are now converting 
labourers, miners, and mechanics into farmers, diminishing the consumers 
and increasing the producers. The more consumers we have, the less 
food we shall have to spare, the- higher will be the price of food in 
England, and the greater will be the quantity of cotton that can be purchased 
by the German and the Russian. The more producers we have, the more 
food we shall have to sell, the lower will be its price, and the smaller will 
be the quantity of cotton that can be produced by the German and the 
Russian. All this seems to me so obviously true, that it needs only to be 
stated. It has been seen that the price of food is here maintained by a home 
demand resulting from the great immigration now taking place, and we 
know that if by causing a demand for labour for the building of furnaces 
and mills, and other similar works, we could cause the immigration to go 
next year to half a million, there would be a further demand for grain, that 
would carry prices to a point still higher. Let us now suppose the immi- 
gration of next year to be 600,000, producing a further increase of demand for 
food to the extent of twenty or thirty millions of dollars, and see what would 
he the effect upon the planter. The Canadian would find a market for his 
grain within the Union, for the price would be sufficiently high to enable 
him to pay the duty. The value of agricultural labour everywhere would 
rise with the increasing price of food ; and every farmer, at home and 
abroad, would consume more cloth, because he could sell the products of 
his labour higher, i. e. he could obtain more cloth and iron for it. The 
German, the Russian, the Irishman and the Englishman would be larger 
customers than now, while the home demand would absorb enormous quan- 
tities that would otherwise go to England to augment " the stock on hand," 
by the size of which is measured the price to be paid for the ensuing crop. 

Our present policy tends to destroy the home market and the foreign 
market too. It diminishes the productiveness of labour on both sides of the 
Atlantic, and all that is taken from the surplus that remains after feeding 
the labourer, is so much taken from the fund that would otherwise go to the 
purchase of cloth or iron. 

THE TOBACCO PLANTER. 

A brief examination of the tobacco trade will show precisely similar re- 
sults. In 1822, we exported 83,000 hogsheads, and the price was $74 82, 
yielding about $6,200,000. In 1845, we exported 147,000 hogsheads, and 
the price was $50, yielding $7,350,000. Deducting the extra expense 
of transportation to the place of shipment, the producers received less for 
\he large quantity. than they had done for the small one. From 1830 to 
1835, the export averaged 90,000, and the amount was $6,200,000, yielding 
to the producer, on his plantation, as much as the larger quantity in 1845. 
The sum of $6,200,000, at these two periods, would have brought in Liver- 
pool : — 



THE HARMONY OF INTERESTS. 



119 



1830 to 1835, pieces of cloth, 3,300,000, or tons of iron, 200,000 
1845, " " 3,900,000 " 130,000 

The planter is giving almost two-thirds more of tobacco for twenty per cent, 
more cloth, although his brother planter is almost ruined by the low price 
of cotton; but in the case of iron it is worse, for he gives two-thirds more 
for thirty-five per cent. less. In the first period, he could have two and one- 
fifth tons for a hogshead; whereas in the last he has little more than one- 
third of the quantity, or seven-eighths of a ton. It is obvious that he is being 
taxed by somebody, that he is giving more and receiving less, and that the 
cause of this is, that the productive power enabling the people outside of the 
Union to pay for tobacco, does not keep pace with the power of those inside 
of the Union to produce it. What is his remedy ? It is to increase the number 
of people inside of the Union, with whom he can have perfect freedom of 
trade. The Englishman will consume six pounds for one that he can now 
consume, burdened as it is with a tax of 3s. per pound; the German will 
do the same; and so will the Frenchman, when he can free himself from 
the tax imposed upon him by the government monopoly. The more men 
that are imported, the more will be transferred from the list of small cus- 
tomers to that of large ones, and the less wilJ be the cost of transportation 
from the place of production in Maryland or Virginia, Ohio or Kentucky, 
to the place of consumption, Philadelphia or New York, Berlin or Vienna ; 
for the larger the bulk and value of the commo'dities transported west, the 
lower will be the charge for transportation eastward. Between the interests 
of the tobacco planter, the manufacturer, and the ship-owner, there is there- 
fore perfect harmony. 

THE SUGAR PLANTER. 

The sugar trade presents the same state of things. The agriculturists of 
the world are giving a constantly increasing quantity of labour as the equiva- 
lent of a constantly diminishing one. The following exhibit of the move- 
ment of the great sugar market, since the commencement of the present 
century, shows that the amount paid for sugar has been constantly dimin- 
ishing, while the price of the English commodities given in exchange has 
varied in a degree so much less that whereas in 1801 the consumption of 14f () - 
persons paid for a ton of iron, that of 24 was required ,'n 1831, and the pro- 
portion has been steadily increasing. The whole sum paid in 1847 for this 
important article of food, by twenty-nine millions of people, was Jess than 
was paid in 1801 by sixteen millions, and the contribution per head was 
less than one-half, and yet the difference in the price of iron was, by com- 
parison, trifling.* 



* The case is the same in regard to all other of the products of the land. In 1841 and 
1842, the colonial timber received in Great Britain averaged 931,000 loads. In 1846 
and 1847, the average was 1,150,000 loads. In 1848, 1,102,000 loads. The price, 
meanwhile, had, however, fallen almost ten per cent.,-f- and the colonist, after paying the 
extra freight, must have received less, in money, for the large than for the small quan- 
tity, while the price of iron had advanced fifty per cent. His timber would therefore 
yield him about forty per cent, less weight of iron to be employed in the further pro- 
duction of timber. The writer from whom I quote gives many other facts to show that 
the increased supplies have been obtained at "the same cost of labour/ or that means 
have been found " for making our [their] own industry more productive.''^ It does not 
matter which, but of the two conditions he "prefers the former." The former is the one, 
and being such it is scarcely to be wondered that the poor and over-taxed colonists desuB 
annexation. 

•f Edinburgh Review, July, 1849. £ Ibid. 



120 



THE HARMONY OF INTERESTS. 



Number of per- 

I sons ft d wirh 

♦ sugar in it- 

Quantity retained for Price per Total value chaise for a 

Population. consumption. — cwts. cwt. consumed. Price per head. Price of iron, ton of iron. 

1801 16,338,000 3.639.000* 45/t £8.188,000 10 2 £7 h\ 142 
1811 18,500,000 3.818,000* 41 6t £7,888,000 8/6 £81 18-8 
lb21 21,200,000 3,529,000* 34/f £6,000,000 5/8 £6 101 23 
1831 24,029,000 4,233,000 23 ;8t £5,000,000 4 2 £b% 24 

I do not extend this table, for Mr. Tooke's list of prices does not come 
down to the end of the next decennial period, and I have no other that ap- 
pears to correspond with it. Enough, however, is given to show that the 
people of the United Kingdom were steadily giving less iron for more sugar. 
In 1801 the planter could have 1,100,000 tons as the equivalent of 180,000 
tons ; but in 1831 he could have but a million of tons as the equivalent of 
210,000. From that time to the present there has been an unceasing ef- 
fort to cheapen sugar, and yet there were taken for consumption (including 
the large quantity exported after being refined) in the years 1845 to 1847, 
only 15,900,000 cwts., or an average of 5,300,000, being only 45 per cent, 
more than in 1801, while the population had increased 90 per cent. It is 
obvious that the power of consumption diminishes, and yet the prices of the 
world are fixed in England. The consequence of this is seen in the fact 
that 5,800,000 tons, in 1 847, would command but £7,200,000, while 3,600,000 
in 1801 would command about £8,200,000. 

The return to labour employed in the cultivation of cotton has fallen so 
tow that the Carolinian tries wheat, and the Mississippian sugar. Sugar 
falls so low that the West Indian turns his attention to coffee. By the time 
his trees have become productive, the price has so far fallen that he cuts 
them down, and then the price rises, while that of sugar falls. § Thus is it 
ever and every where- The producers are over-ridden by the exchangers, 
and so must they continue to be while they shall continue to have the price 
of their whole crops determined by that which can be obtained for a small 
surplus in the constantly diminishing market of England. 

The production of sugar does not vary greatly from a million of tons, and 
the yield to the planter may be about $70, the whole amount being about 
$70,000,000. Taking the cotton crop at 880,000,000, we have the sum of 
SI 50,000,000 as the value of the labour of that large portion of the popula- 
tion of the world employed in producing these two articles, so essential to 
the comfort of the rest of the world. The equivalent of this sum in 1845 
and 1846 might have been (delivered on the plantation) about 2,500,000 
tons of iron, the article that, of all others, is most essential to the mainte- 
nance, or the increase, of the productive power. 

A ton of bar iron is not the equivalent of twenty-five days' labour, pro- 
perly employed among the coal and iron fields of the Union, but even at 
that rate, one man would give more than twelve tons per annum. To pro- 
duce the whole quantity required to pay for the cotton and sugar crops of 
the world would require, then, the labour of 200,000 men. Is it not obvious 
that the agriculturists of the world are taxed to a vast amount for the-support 



* Porter's Progress of the Nation. Vol. III. page 32. 

1 Tooke's History of Prices, Vol. II. page 413. Mr. Tooke gives the various prices cf 
the year. I have taken what appears to me to be the average. 
i Ibid. p. 406. 

§ From this cause it is that coffee is now scarce and high, and sugar abundant and 
cheap, the price of the latter in London being but about 24s. How much is left for the 
poor producer that has paid freight from Benares, far up the Ganges, and all the charges 
of all the persons through whose hands it has passed, may readily be imagined. Twenty 
pounds of sugar must be required to pay for one of cotton, in the form of coarse cloti. 



THE HARMONY OF INTERESTS. 



121 



of the fleets and armies, the merchants and brokers, the paupers and the 
noblemen of Great Britain, and is it not incumbent upon them to free them- 
selves from such a state of vassalage ? To add to the present annual pro- 
duction of the Union in the next seven years, the whole quantity of iron 
required to pay for the cotton and sugar crops of the world would require 
not the slightest effort, and so far would it be from diminishing the supply 
of food, or cotton, that .the product-ion of both would increase at a rate more 
rapid than was ever before known, for the farmer and the planter would 
thus obtain a market on the land for the products of the land, and good roads 
to go to distant markets, and the chief part of the time and labour now 
wasted in the work of transportation might be given to the work of cultiva- 
tion. We should then import hundreds of thousands of men to make roads 
through the States already organized, instead of exporting hundreds of 
thousands to California, and then squandering our resources in the prema- 
ture effort to make a road by which to communicate with them. 

It is time for the cotton planter to look this question fully in the face. 
Had he a market, he could in a brief period increase the crop to 5,000,000 
of bales. Having no market, he is compelled to limit the cultivation, and 
thus it is that the product of such a region as South Alabama does not in- 
crease. In 18:59 it yielded, bales, 551,000 

From 1S45 to the present time the average has been only 440.000* 
The people who should be raising cotton, or making iron, are perpetually 
on the move, producing nothing. The picture presented in the following 
paragraph, taken from one of the papers of the day, is the one that meets 
our eyes look where we may : — 

"The tide of emigration continues to pour through our city southward and westward 
with increasing volume. The rush is tremendous. Throughout the day, from early dawn 
until late at night, long trains of wagons, families, and forces are seen moving through 
our streets. Both our ferries are kept in continual operation. Mr. Fairhurst, one of the 
proprietors of the lower ferry, has kept a memorandum of the movers crossing at that 
point during the last two weeks. In that time three hundred and fifteen wagons have crossed 
the river, of which number 214 were bound for Texas, 89 for the southern counties of 
our own State, and 12 for Louisiana. It is estimated that, counting whites and blacks, 
there are about five persons to each wagon. This would show that within the last four- 
teen days about fifteen hundred movers have passed this one ferry. We have no record 
of the number crossing at the upper ferry, but if it is as large as the lower, the number 
of movers passing through our city during the present month will be about six thousand /" 
— Little Rock {Arkansas} Democrat, Nov. 16. 

Those men are flying from the rich and unoccupied soils of lower Caro- 
lina and South Alabama to the high lands of Arkansas and Texas, thus in- 
creasing their necessity for transportation, and diminishing their power to 
obtain it. Let them fly as they may, they cannot fly so fast as to prevent 
the increase of the cotton crop, the average of which must soon stand at 
3,000,000 of bales ; but where then shall the planter find a market ? Among 
the sugar planters of the world ? Like himself, they are ruined for want 
of a market. Among the coffee growers ? Like himself, they are ruined 
for want of a market. Among the wheat growers ? The Russian wastes 
his crop for want of a market, and the American is competing with him for 
the possession of that of England, while the Englishman is ruined by com- 
petition with both.t Is it among the operatives of England ? They are 



* De Bow's Commercial Review, Vol. VII. page 446. 

•fThe following passage from one of the journals of the day, presents a tolerably cor- 
rect view of the course of things in Great Britain. The producers are being ruined, and 
all are becoming consumers, and thus it is that Ireland, exclusively agricultural, furnishes 
a market for food. It is forgotten, however, that every diminution in the amount of prr> 

16 



122 



THE HARMONY OF INTERESTS. 



endeavouring to underwork the Hindoo, and their power to purchase cotton 
or sugar diminishes daily. They need a market for their labour. Is it in 
France ? France is always at war, and produces little. Her consumption 
of American cotton in 1842 and 1843 was 717,000 bales. In 1846 and 
1847, only 575,000.* 

Look where he may, he must see that the producers of the world want 
markets, and that for want of them they are becoming poorer instead of 
richer, and that their power to obtain even the machinery of production is 
daily diminishing, the price of iron in sugar, coffee, cotton, wheat, indigo, or 
any other of the products of the earth, tending steadily upward, and yet 
there is no single commodity in the world that would tend to fall so steadily, 
but for the existence of the monopoly system. The supply might be in- 
creased to an indefinite amount, and with a rapidity far exceeding that of 
any otherof the products of the earth. Make a market for it requiring annually 
10,000,000 of tons, and this country could supply it in ten years. Double 
or treble it, and we could supply the whole in reasonable time, for our ca- 
pacity is without limit, and we could command the services of half the 
labourers of Europe. Here it is, and here alone, that the planter can look 
for a market capable of expanding itself in the ratio of the increase in his 
power to furnish supplies. Here, and here alone, can the market for coffee, 
silk, indigo, and all other of the products of the world be so far enlarged as 
to enable the coffee planter, and the cultivator of silk and indigo to quadruple 
their consumption of cotton. 

CHAPTER ELEVENTH. 

HOW PROTECTION AFFECTS THE LANDOWNER. 

The great saving fund is the land, and it is by the almost insensible 
contribution of labour that it acquires value. The first object of the poor 
cultivator of the thin soils is to obtain food and clothing for himself and his 
family. His leisure is given to the work of improvement. At one place 
he cuts a little drain, and at another he roots out a stump. At one moment 
he cuts fuel for his family, and thus clears his land, and at another digs 



duction diminishes the amount of commodities that can be given as the equivalent of the 
products of others, and that those who buy food have little to give for clothing, and must 
go in rags: — 

" The prospect of an Irish demand for corn is improving, and also that the dependence 
of England, on foreign supplies, will gradually increase. The land monopoly of E ngland, 
by adding the item of rent to be paid by the occupier and producer, made requisite a tax 
on the foreign article, which should protect him against the proprietary producers abroad, 
who had no rent to pay. The removal of this tax has now thrown directly upon the 
English farmer the whole burden of his rent, which was before borne by ail consumers 
of bread. This burden will be enhanced, by the abrogation of the navigation laws, 
which, by diminishing freights, will make the competition between the cheap rentless 
lands of other countries, and the landlord-burdened soil of England, more severe, and, as 
a consequence, much of the poorer soils will be abandoned, while the expensive system 
of culture before resorted to, to increase the quantity of protected corn, must be relin- 
quished as unprofitable. A considerable diminution in the product of a good English 
harvest, as compared with former years, may then freely be looked for. We have given 
above an official table of the quantity of food taken for consumption in England, for the 
year ending August, 1849. That was in aid of the harvest of 1848, which was "good," 
but the acreable product, from causes alluded, could not have been as large as usual. 
The result of this is, that the small farmers, with small crops at low prices, cannot meet 
tithes, taxes, poor rates, and rent, the last the most onerous ; and their capital and num- 
bers are annually diminishing, swelling the numbers of bread-consumers in other em- 
ployments." 

* Merchants' Magazine, Vol. XVII. page r /62 



THE HARMONY OF INTERESTS. 



123 



a well to facilitate the watering of his cattle, and thus keep his manure in 
the stabie-yard. He knows that the machine will feed him better the more 
perfectly he fashions it, and that there is always place for his time and his 
labour to be expended with advantage to himself. 

The land was given to man for his use, and the basis of the whole science 
of political economy is to be found in the law which governs his relation 
with this great and only machine of production. Mr. Kicardo taught that 
in the infancy of society men could command rich soils, from which they 
could obtain an abundant supply of food ; but that with fhe growth of popu- 
lation food became more scarce, producing a necessity for dispersion in 
quest of those rich soils. The common sense of mankind teaches the 
contrary, and in this case, as in all others, the common sense of the many 
is right, while the uncommon sense of the few is wrong, as will be seen by 
all who will take the trouble to follow out the following sketch* of the 
gradual occupation of the earth : — 

" The first cultivator commences his operations on the hill-side. Below 
him are lands upon which have been carried, by force of water, the richer 
portions of those above, as well as the leaves of trees, and the fallen trees 
themselves; all of which have there, from time immemorial, rotted and 
become incorporated with the earth, and thus have been produced soils 
fitted to yield the largest returns to labour: yet for this reason are they 
inaccessible. Their character exhibits itself in the enormous trees with 
which they are covered, and in their power of retaining the water necessary 
to aid the process of decomposition ; but the poor settler wants the power 
either to clear them of their timber, or to drain them of the superfluous 
moisture. He begins on the hill-side, but at the next step we find him 
descending the hill, and obtaining larger returns to labour. He has more 
food for himself, and he has now the means of feeding a horse or an ox. 
Aided by the manure that is thus yielded to him by the better lands, we see 
him next retracing his steps, improving the hill-side, and compelling it to 
yield a return double that which he at first obtained. With each step down 
the hill he obtains still larger reward for his labour, and at each he returns, 
with increased power, to the cultivation of the original poor soil. He has 
now horses and oxen, and while by their aid he extracts from the new soils 
the manure that had accumulated for ages, he has also carts and wagons to 
carry it up the hill: and at each step his reward is increased, while his 
labours are lessened. He goes back to the sand and raises the marl, with 
which he covers the surface ; or he returns to the clay and sinks into the 
limestone, by aid of which he doubles its product. He is all the time mak- 
ing a machine which feeds him while he makes it, and which increases in 
its powers the more he takes from it. At first it was worthless. It has 
fed and clothed him for years, and now it has a large value, and those who 
might desire to use it would pay him a large rent. 

" The earth is a great machine, given to man to be fashioned to his pur- 
pose. The more he fashions it the better it feeds him, because each step 
is but preparatory to a new one more productive than the last ; requiring 
less labour and yielding larger return. The labour of clearing is great, yet 
the return is small. The earth is covered with stumps, and filled with roots. 
With each year the roots decay and the ground becomes enriched, while 
the labour of ploughing is diminished. At length the stumps disappear, 
and the return is doubled, while the labour is less by one-half than at first. 
To forward this process the owner has done nothing but crop the ground : 
nature having done the rest. The aid he thus obtains from her yields him 

* Origina'.ly published in my book. « The Past, the Present, and the Future." 



124 



THE HARMONY OF INTERESTS. 



as much food as in the outset was obtained by the labour of felling and de- 
stroying the trees. This, however, is not all. The surplus thus yielded 
has given him means for improving the poorer lands by furnishing manure 
with which to enrich them, and thus he has trebled his original return 
without further labour ; for that which he saves in working the new soils 
suffices to carry the manure to the old ones. He is obtaining a daily in- 
creased power over the various treasures of the earth. 

"With every operation connected with the fashioning of the earth, the 
result is the same. The first step is, invariably, the most costly one, and 
the least productive. The first drain commences near the stream, where 
the labour is heaviest. It frees from water but a few acres. A little higher, 
the same quantity of labour, profiting by what has been already done, frees 
twice the number. Again the number is doubled, and now the most perfect 
system of thorough drainage maybe established with less labour than was 
at first required for one of the most imperfect kind. To bring the lime 
into connection with the clay, upon fifty acres, is lighter labour than was the 
clearing of a single one, yet the process doubles the return for each acre of 
the fifty. The man who wants a little fuel for his own use, expends much 
labour in opening the neighbouring vein of coal. To enlarge this, so as 
to double the product, is a work of comparatively small labour; as is the 
next enlargement, by which he is enabled to use a drift wagon, giving him 
a return fifty times greater than was obtained when he used only his arms, 
or a wheelbarrow. To sink a shaft to the first vein below the surface, and 
erect a steam-engine, are expensive operations; but these once accomplished 
every future step becomes more productive, while less costly. To sink to 
the next vein below and to tunnel to another, are trifles in comparison with 
the first, yet each furnishes a return equally large. The first line of rail- 
road runs by houses and towns occupied by one or two hundred thousand 
persons. Half a dozen little branches, costing together far less labour than 
the first, bring into connexion with it three hundred thousand, or perhaps 
half a million. The trade increases, and a second track, a third, or a fourth, 
may be required. The original one facilitates the passage of the materials 
and the removal of obstructions, and three new ones may now be made with 
less labour than was required for the first. 

44 All labour thus expended in fashioning the great machine, is but the 
prelude to the application of further labour with still increased returns. 
With each such application wages rise, and hence it is that portions of the 
machine, as it exists, invariably exchange, when brought to market, for far 
less labour than they have cost. The man who cultivated the thin soils 
was happy to obtain a hundred bushels for his year's work. With the pro- 
gress of himself and his neighbour down the hill into the more fertile soils, 
wages have risen, and two hundred bushels are now required. His farm 
will yield a thousand bushels; but it requires the labour of four men, who 
must have two hundred bushels each, and the surplus is but two hundred 
bushels. At twenty years' purchase this gives a capital of four thousand 
bushels, or the equivalent of twenty years' wages; whereas it has cost, in 
the labour of himself, his sons, and his assistants, the equivalent of a hun- 
dred years of labour, or peihaps far more. During all this time, however, 
it has fed and clothed them all, and the farm has been produced by the 
insensible contributions made from year to year, unthought of and unfelt. 

44 It is now worth twenty years' wages, because its owner has for years 
taken from it a thousand bushels annually ; but when it had lain for cen- 
turies accumulating wealth, it was worth nothing. Such is the case with 
the earth everywhere. The more that is taken from it, the more there is 
left. When the coal mines of England were untouched, they were valueless. 



THE HARMONY OF INTERESTS. 



125 



Now their value is almost countless; yet the land contains abundant sup- 
plies for thousands of years. Irotl ore, a century since, was a drug, and 
leases were granted at almost nominal rents. Now, such leases are deemed 
equivalent to the possession of large fortunes, notwithstanding the great 
quantities that have been removed, although the amount of ore now known 
to exist is probably fifty times greater than it was then. 

"77/f earth, is the sole producer. Man fashions and exchanges. A part 
of his labour is applied to the fashioning of the great machine, and this 
produces changes that are permanent. The drain, once cut, remains a 
drain ; and the limestone, once reduced to lime, never again becomes lime- 
stone. It passes into the food of man and animals, and ever after takes its 
part in the same round with the clay with which it has been incorporated. 
The iron rusts and gradually passes into soil, to take its part with the clay 
and the lime. That portion of his labour gives him wages while preparing 
the machine for greater future production. That other portion which he 
expends on fashioning and exchanging the products of the machine, pro- 
duces temporary results, and gives him wages alcne. Whatever tends, 
therefore, to diminish the quantity of labour necessary for the fashioning 
and exchanging of the products, tends to increase the quantity that may be 
given to increasing the amount of products, and to preparing the great 
machine ; and thus, while increasing the present return to labour, preparing 
for a future further increase. 

" The first poor cultivator obtains a hundred bushels for his year's wages. 
To pound this between two stones requires twenty days of labour, and the 
work is not half done. Had he a mill in the neighbourhood he would have 
better flour, and he would have almost his whole twenty days to bestow 
upon his land. He pulls up his grain. Had he a scythe, he would have 
more time for the preparation of the machine of production. He loses his 
axe, and it requires days of himself and his horse on the road, to obtain 
another. His machine loses the time and the manure, both of which would 
have been saved, had the axe-ma'ker been at hand. The real advantage 
derived from the mill and the scythe, and from the proximity of the axe- 
maker, consists simply in the power which they afford him to devote his 
labour more and more to the preparation of the great machine of production, 
and such is the case with all the machinery of preparation and exchange. 
The plough enables him to do as much in one day as with a spade he could 
do in five. He saves four day* for drainage. The steam-engine drains, as 
much as without it could be drained by thousands of days of labour. He 
has more leisure to marl or lime his land. The more he can extract from 
his machine the greater is its value, because every thing he takes is, by the 
very act of taking it, fashioned to aid further production. The machine, 
therefore, improves by use ; whereas spades, and ploughs, and steam-engines, 
and all other of the machines used by man, are but the various forms into 
which he fashions parts of the great original machine, to disappear in the 
act of being used ; as much so as food, though not so rapidly. The earth 
is the great labour savings' bank, and the value to man of all other machines 
is in the direct ratio of their tendency to aid him in increasing his deposits 
in the only bank whose dividends are perpetually increasing, while its 
capital is perpetually doubling. That it may continue for ever so to do, all 
that it asks is that it shall receive back the refuse of its produce, the ma- 
nure ; and that it may do so, the consumer and the producer must take their 
places by each other. That done, every change that is effected becomes 
permanent, and tends to facilitate other and greater changes. The whole 
business of the farmer consists in making and improving soils, and the earth 



126 



THE HARMONY OF INTERESTS. 



rewards him for his kindness by giving him more and more food the more 
attention he bestows upon her. 

The solitary settler has to occupy the spots that, with his rude machinery, 
he can cultivate. Having neither horse nor cart, he carries home his crop 
upon his shoulders, as is now done in many parts of India. He carries a 
hide to the place of exchange, distant, perhaps, fifty miles, to obtain for it 
leather or shoes. Population increases, and roads are made. More fertile 
soils are cultivated. The store and the mill come nearer to him, and he 
obtains shoes and flour with the use of less machinery of exchange. He 
has more leisure for the preparation of his great machine, and the returns 
to labour increase. More people now obtain food from the same surface, 
and new places of exchange appear. The wool is, on the spot, converted 
into cloth, and he exchanges directly with the clothier. The saw-mill is at 
hand, and he exchanges with the sawyer. The tanner gives him leather 
for his hides, and the paper-maker gives him paper for his rags. With 
each of these changes he has more and more of both time and manure to 
devote to the preparation of the great food-making machine, and with each 
year the returns are larger. His poiver to command the use of the ma- 
chinery of exchange increases, but his necessity therefor diminishes ; for 
with each year there is an increasing tendency towards having the consumer 
placed side by side with the producer ; and with each he can devote more 
and more of his time and mind to the business of fashioning the great instru- 
ment ; and thus the increase of consuming population is essential to the 
progress of production. 

" The loss from the use of machinery of exchange is in the ratio of the 
bulk of the article to be exchanged. Food stands first; fuel, next; stone 
for building, third; iron, fourth; cotton, fifth; and so on; diminishing until 
we come to laces and nutmegs. The raw material is that in the production 
of which the earth has most co-operated, and by the production of which 
the land is most improved; and the nearer the place of exchange or con- 
version can be brought to the place of production, the less is the loss in the 
process, and the greater the power of accumulating wealth for the produc- 
tion of further wealth. 

" The man who raises food on his own land is building up the machine 
for doing so to more advantage in the following year. His neighbour, to 
whom it is given, on condition of sitting still, loses a year's work on his 
machine, and all he has gained is the pleasure of doing nothing. If he has 
employed himself and his horses and wagon in bringing it home, the same 
number of days that would have been required for raising it, he has misem- 
ployed his time, for his farm is unimproved. He has wasted labour and ma- 
nure. As nobody, however, gives, it is obvious that the man who has a farm 
and obtains his food elsewhere, must pay for raising it, and pay also for trans- 
porting it ; and that although he may have obtained as good wages in some 
other pursuit, his farm, instead of having been improved by a year's 
cultivation, is worse by a year's neglect; and that he is a poorer man than 
he would have been had he raised his own food. 

" The article of next greatest bulk is fuel. While warming his house, he 
is clearing his land. He would lose by sitting idle, if his neighbour brought 
his fuel to him, and still more if he had to spend the same time in hauling 
it, because he would be wearing out his wagon and losing the manure. Were 
he to hire himself and his wagon to another for the same quantity of fuel 
he could have cut on his own property, he would be a loser, for his farm 
would be uncleared. 

" If he take the stone from his own fields to build his house, he gains 
doubly. His house is built, and his land is cleared. If he sit still and let 



THE HARMONY OF INTERESTS. 



127 



his neighbour bring- him stone, he loses, for his fields remain unfit for cul 
tivation. If he work equally hard for a neighbour, and receive the same 
apparent wages, he is a loser by the fact that he has yet to remove the 
stones, and until they shall be removed he cannot cultivate his land. 

" With every improvement in the machinery of exchange there is a dimi- 
nution in the proportion which that machinery bears to the mass of produc- 
tion, because of the extraordinary increase of product consequent upon the 
increased power of applying labour to building up the great machine. It 
is a matter of daily observation that the demand for horses arid men increases 
as railroads drive them from the turnpikes, and the reason is, that the farmer's 
means of improving his land increase more rapidly than men and horses 
for his work. The man who has, thus for, sent to market his half-fed cattle, 
accompanied by horses and men to drive them, and wagons and horses 
loaded with hay or turnips with which to feed them on the road, and to fat- 
ten them when at market; now fattens them on the ground, and sends them 
by railroad ready for the slaughter-house. His use of the machinery of 
exchange is diminished nine-tenths. He keeps his men, his horses and his 
wagons, and the refuse of his hay or turnips, at home. The former are 
em-ployed in ditching and draining, while the latter fertilizes the soil here- 
tofore cultivated. His production doubles, and he accumulates rapidly, 
while the people around him have more to eat, more to spend in clothing, 
and accumulate more themselves. He wants labourers in the field, and 
they want clothes and houses. The shoemaker and the carpenter, finding 
thai there exists a demand for their labour, now join the community, eating 
the food on the ground on which it is produced; and thus the machinery of 
exchange is improved, while the quantity required is diminished. The 
quantity of flour consumed on the spot induces the miller to come and eat 
his share, while preparing that of others. The labour of exchanging is 
diminished, and more is given to the land, and the lime is now turned up. 
Tons of turnips are obtained from the same surface that before gave bushels 
of rye. The quantity to be consumed increases faster than the population, 
and more mouths are needed on the spot, and next the woollen mill comes. 
The wool no longer requires wagons and horses, which now are turned to 
transporting coal, to enable the farmer to dispense with his woods, and to 
reduce to cultivation the fine soil that has, for centuries, produced nothing 
but timber. Production again increases, and the new wealth now takes the 
form of the cotton-mill; and, with every step in the progress, the farmer 
finds new demands on the great machine he has constructed, accompanied 
with increased power on his part to build it up higher and stronger, and to 
sink its foundations deeper. He now supplies beef and mutton, wheat, but- 
ter, eggs, poultry, cheese, and every other of the comforts and luxuries of 
life, for which the climate is suited; and from the same land which afforded, 
when his father or grandfather first commenced cultivation on the light soil 
of the hills, scarcely sufficient rye or barley to support life." 

If we undertake to study anywhere the cause of value in land, it will be 
found to result from diminution in the cost of transportation. The news- 
papers of the day, in speaking of the operations of the railroad recently 
constructed from Springfield (Illinois) to the Illinois river, tell us that 

' ; One week before the railroad was finished, corn could be had here in any quantity, 
at 15 cents a bushel. Not a bushel can now," says the Saugamon Journal, "be had for 
less than 25 cents. This," it adds, " is the effect of the completion of the railroad on the 
price of one article of the products of our farmers." 

The first, thing to be paid by land is transportation. When that is so 
great as to eat up the whole proceeds, the land will remain uncultivated 



128 



THE HARMONY OF INTERESTS. 



Diminish the cost of transportation so as to leave sufficient to pay the wages 
of labour, and it wall be cultivated, but it will pay no rent. Diminish it 
further, so as to leave a surplus over and above the reward of the labourer, 
and the land itself will acquire value. Diminish it still further, by removing 
altogether the necessity for transportation, making a market on the land fi r 
all the products of the Jand, enabling the farmer readily to return to it all 
the refuse of its products, and it will acquire the highest value of which 
land is capable. The commodity of which the government and people of 
the Union have most to sell is land. In quantity it is practically unlimited, 
and long before our present territory shall have been even laid out for sale, 
Fast countries will have been brought within the limits of the Union. In 
quality it is entitled to stand first in the world. The area of the coal 
region is 133,000 square miles. Iron ore is every where, untouched. Copper, 
zinc, and almost all other metals abound. South Carolina has millions of 
acres of the finest meadow-land unoccupied, and she has lime and iron ore 
in unlimited abundance. Virginia is in a similar condition, and yet people 
are leaving both, when population is all that is needed to place them in the 
first rank among the States of the Union in point of wealth. Of the three 
States of Alabama, Louisiana, and Mississippi, with advantages unrivalled 
for the production of the great clothing material of the world, two-thirds 
of their whole surface, or 83,000,000 of acres, yet remain unsold. The land 
at the command of the government counts by hundreds of millions, and to 
give to all this value we need only population. 

In Europe, on the contrary, population is held to be superabundant. 
Marriage is regarded as a luxury, not to be indulged in, lest it should result 
in increase of numbers. " Every one," it is said, " has a right to live," but 
this being granted, it is added that "no one has a right to bring creatures 
into life to be supported by other people."* Poor laws are denounced, as 
tending to promote increase of population — as a machine for supporting those 
who do not work "out of the earnings of those who do."t No man, it is 
thought, has "a right" to claim to have a seat at the great table provided by 
the Creator for all mankind, or that " if he is willing to work he must be 
fed." Labour is held to be a mere "commodity," and if the labourer can- 
not sell it, he has no " right" but to starve — himself, his wife, and his chil- 
dren. "The particular tendency to error apparent in the prevalent social 
philosophy of the day," to which it is deemed necessary to direct special 
attention, is " the unsound, exaggerated, and somewhat maudlin tenderness 
with which it is now the fashion to regard paupers and criminals. "J Such 
are the doctrines of the free-trade school of England, in which Political 
Economy is held to be limited to an examination of the laws which regulate 
the production of wealth, without reference to either morals or intellect. Under 
such teaching it is matter of small surprise that pauperism and crime in- 
crease at a rate so rapid. § 

Throughout Europe, men are held in low esteem. They are considered 
to be surplus, and the sooner they can be expelled the better it will be for 
those who can afford to remain behind. To accomplish this object, Coloniza- 
tion Societies are formed, and Parliament is memorialized by men who desire 
to export their fellow-men by hundreds of thousands annual!}^. Whig and 
Tory journals!! unite in urging the necessity for expelling man from the 

* J. S. Mill's Principles of Political Economy. 

+ Edinburgh Review, October, 1S49. * Ibid. 

§ See article on Transportation, Blackwood's Magazine, November, 1849. 
8 The number of Blackwood's Magazine, just received, advocates the application of 
£300,000 per annum to this object. 



129 



land of Britain. Secretaries of State furnish ingenious calculations as to 
the amount required for accomplishing the work of expulsion. On all 
hands, it is agreed that men are too numerous, and that their numbers grow 
too fast, and yet there is not a country in Europe that can justly complain 
of over-population. Ireland, the type of this free-trade system, has millions of 
acres of her richest lands as yet untouched, that would alone, if drained, 
yield food in abundance for the whole population. 

It is not, however, the labourer alone that stands in need of aid. The 
condition of the land-owner is little better. This system of universal discord 
is thus described in one of the journals of the day: 

u The state of the country is frightful. The assassinations are computed at more than ten 
per week, half a hundred per month, which, added to the systematic starvation of almost 
another hundred, in the^ ( same time, gives a state of things without parallel in modern 
civilization. With this diminution of the people, the million of work-house inmates and 
dependents increases. In less than a month it will be more than a proprietor's life is 
worth to be seen by his tenantry. Rents, which of course are nominal in collection, have, 
therefore, lately sunk to the fourth of their nominal amount. Lands, let hitherto at £2 
10s. per acre, are offered at less than 15s; and such is the exasperation of the starving 
millions, that the landlords are afraid further to aggravate their sufferings." 

The Parliament of England is now engaged in passing laws to transfer, 
for the fourth time in little more than two centuries, the mass of Irish pro- 
perty to English undertakers. The little cultivator of land has been 
ruined. Labour has become utterly valueless, although labour alone is 
needed to bring into cultivation 7,000,000 of acres of the richest soils in the 
world, now unproductive. 

The land-owner of India has been ruined. The immense body of vil- 
lage proprietors that but half a century since existed in that country, helping 
and governing themselves, has disappeared. 

The land-owner of the West Indies — of Demerara and Berbice — has 
been ruined, and the condition of the labourers has not been improved. 

The land-owner of Portugal — the continental colony of Great Britain — 
has been ruined, and with diminished value of land there has been steady 
deterioration of civilization, until the name of Portugal has become almost 
synonymous with weakness and barbarism. 

If we look to Canada, Nova Scotia, or New Brunswick, the same picture 
meets our view. "Land of the same quality, at one minute north of the 
imaginary line dividing the provinces from the Union, is worth less than 
half as much as that which is one minute south of it. Lord Durham, 
in his report, made but a few years since, says that "land in Vermont and 
New Hampshire, close to the line, is five dollars per acre, and in the adjoining 
British townships, only one dollar," and that on the northern side of the line, 
with superior fertility, it is " wholly unsaleable even at such low prices." 
Canada has no market on the land for the products of the land, and the cost 
of transportation eats up the product, much of which is absolutely wasted 
because it cannot go at all to market. The labour of men, women, and 
children, and that of wagons and horses, is everywhere being wasted, and 
therefore it is that the Canadian desires a change of government that will 
enable him to obtain a protective tariff. Give him that — annex him to the 
Union — and his land will acquire value similar to that of the Union. Far- 
mers will then grow rich, and labourers will grow rich, and the power to con- 
sume cloth and iron will grow with the same rapidity with which it re- 
cently grew with us. 

Every colony of England would gladly separate from her, feeling that 
connection with her is synonymous with deterioration of condition. Every 
one would gladly unite its fortunes with those of our Union, feeling that 

17 



130 



THE HARMONY OF INTERESTS. 



connection with us is synonymous with improvement. The reason for 
all this is, that the English system is based upon cheap labour, and tends 
to depress the many for the benefit of the few. In our system, it is the 
many who govern ; and experience having taught them that prosperity and 
free trade with England are inconsistent with each other, we have " free 
trade" tariffs with protective duties of thirty per cent., and likely to be in- 
creased. The colonies are ruined by free trade, and they desire annexation, 
that they may have protection. 

This idea of cheap labour is universal among English colonists. It is 
found in all their books. If they fail to succeed, it is because labour is "too 
high." They are willing to receive convicts, because they can be had 
"cheap." They tell their correspondents that men may be had from the 
Continent who will work for small wages, while Englishmen must have 
large ones, i. e. enough to feed and clothe themselves comfortably. They 
emancipate the negroes, and then they find their labour " too dear," and 
send to India, or to the coast of Africa, for " cheap" labourers. The Times 
informs us that the great works of England are based upon an ample supply 
of " cheap labour." The whole system looks to the degradation of the 
labourer, by requiring him to underwork and supplant the labourer of other 
countries, with all the disadvantage of distance and heavy cost of transporta- 
tion. Protection looks to raising the value of labour, and thus promoting 
the annexation of individuals, and the establishment of perfect free trade 
between ourselves and the people of Europe by inducing them to transfer 
themselves to our shores. It is a bounty on the importation of the machine 
we need — man — to give value to the machine we have in such abundance 
— land. It leads to perfect free trade — the annexation of nations — by raisirrg 
the value of man throughout the world. 

It has been, at times, matter of surprise that the hundreds of thousands 
who have arrived in this country have been so instantly absorbed that 
their presence has been unfelt, and that the more we received, the larger 
was the quantity of food, fuel, cloth, and iron given in exchange for labour, 
but such is the natural result of a system which tends to enable the miner 
and the worker in iron, the spinner and the weaver, to combine their exer- 
tions with those of the farmer and planter. Had the policy of 1828 remained 
unchanged, and were we now receiving a million of men, the only effect 
that would be observed, would be that wages and profits, and the power of 
labourer, landowner, and capitalist, to command the good things of life 
would be steadily increasing, and with each step forward the tendency to 
immigration and to increase in the value of land would grow with accelerated 
pace. We need population. 

In the thorough adoption of this course by the people of the Union, is to 
be found the remedy of the ills of both the land-owners and the labourers of 
the rest of the world, and the removal of the discords now so universal. 
That we may clearly see how it would contribute towards producing har- 
mony, we must first inquire into the causes of discord. 

The labourers of the world have one common interest, and that is that 
labour should become everywhere productive and valuable. The more 
wheat produced in return to a given quantity of labour, the more of it will 
the shoemaker obtain for his work, and the more advantageously the shoe- 
maker can apply his labour, the more readily will the farmer provide him- 
self and his family with shoes. Such, likewise, is the case with nations. 
It is to the interest of all that labour in all should become productive, and if 
the labour of the cotton-growing nation become unproductive, that of the 
sugar or wheat-growing nation feels the effect in an increased difficulty of 
obtaining clothing. 



THE HARMONY OF INTERESTS. 



131 



The land-owners of the world have one common interest, and that is, that 
i.and should everywhere become productive and \ T aluable. It does so be- 
come with every increase in the skill and intelligence of the labourer, as 
may be seen by a comparison of times present with times past in every im- 
proving country, or by a comparison of the various countries of the world at 
the present moment. In Russia land itself has little value. In Belgium, 
where cultivation is carried on with intelligence elsewhere unknown, it has 
great value. 

Every increase in the facility of obtaining cloth for food, or food for cotton, 
diminishes the quantity of labour to be given for food or clothing, and enables 
the producer to obtain other commodities and things needed for the improve- 
ment of his mind, or which tend to enable, him more advantageously to apply 
his labour. The landed proprietor of England is therefore directly inte- 
rested in the improvement of the mode of cultivating cotton in the United 
States, because it tends to improve the condition of the man who labours on 
his land ; and the cotton-grower is interested in the improvement of the 
wheat-grower of Russia, because the latter is thereby enabled to purchase 
more clothing. 

Among the land-owners and labourers of the world there is, therefore, 
perfect harmony of interests. Between them stand the men employed in 
the work of transportation, conversion and exchange — ship-owners, manu- 
facturers, and merchants. 

The object had in view in the prohibition of manufactures in the colo- 
nies was that of compelling the colonists to use ships that they would not 
otherwise require, and to pay manufacturers and merchants for doing for 
them those things that they could have better done themselves. The 
necessary consequence of this was discord, which in our case led to war, 
and vast waste of time and money. Another consequence was, that the 
people engaged in the work of transportation, conversion, and exchange, in- 
creased more rapidly than the producers, and England, from having food to 
sell, became a purchaser of foreign food. Next came the corn-laws, by 
which the importation of food was to be prevented, for the benefit of land- 
owners, and other laws prohibiting the export of machinery, for the benefit 
of the owners of ships and machinery of various kinds. By the one the 
owners of land were enabled to tax the labourer and the mechanic, and by 
the other the mechanic was enabled to tax the world in return. The effect 
has been that of preventing the application of English labour and capital to 
the work of production, and driving it into the far less profitable work of 
transportation, conversion, and exchange, to such an extent that the con- 
verters have at length become masters of the land-owners, and have abolished 
restrictions on the import of food which the latter had established for their pro- 
tection, and as revolutions never go backward, we may fairly conclude that the 
corn-laws will not be re-established. The result, thus far, has been to ruin 
the landholders of Ireland, and the next result must be to ruin those of Eng- 
land, if the system be allowed fair play. 

The people of Russia, we are assured, have been compelled to waste food 
for want of a market. Rather than do this, they would give a bushel of 
wheat for a yard of cloth. That they cannot afford to do this, we are 
assured ; but what else can they do ? If they cannot make cloth they must 
buy it, and they must give an equivalent, and if that be even bushels for 
yards, they must give them. Until Russia can make a market for this now 
surplus food, it will seek a market at any price, and the price in England 
cannot much exceed the cost of transportation between the farm on which 
it was produced and the town at which it is consumed. Nearly the whole 
of that price must go to the exchanger, to the Joss of both land and labour, 



132 



THE HARMONY OF INTERESTS. 



both of which must tend towards the Russian level, now a very low one, 
because of the absence of a market on the land for the products of the land. 

The object of the now dominant class in England is that of bringing 
about free trade with the world. Such a measure adopted by this country 
would close every furnace and rolling-mill, and every cotton and woollen 
factory in the country, and would diminish the value of both labour and 
land, by compelling the producer of food to seek a market in England. 
Similar measures adopted by the Zoll-verein, would compel the people of 
Germany to do the same, attended with similar results. The market of 
England would be borne down with the weight, and the price would fall so 
low as utterly to destroy the power of the labourer on land to pay rent for 
its use, and the power of the owner to improve it. The class intermediate 
between the producers in various parts of the world, would daily grow in 
numbers and strength, and the productiveness of labour and land would 
daily diminish, with steady diminution in the value of both. 

On the other hand, let us suppose the people of the Union, of Russia, and 
of Germany, to adopt such measures as would enable them to consume on 
the land the whole of the food produced upon the land, and thus to put a 
stop to the enormous imports by which the English agriculturist is now 
being crushed. The immediate effect would be that the labour and land of 
all those countries would rise in value, and therewith there would be an in- 
crease in the value of both in England. The demand for labour here would 
speedily drain off the surplus hands employed in factory labour, and the 
increased demand for home-grown food would induce the application of 
labour and capital to production,* and the value of both would rise. Con- 
sumption would increase as labour became more productive, and the power 
of the producers would be restored, while that of the mere exchangers would 
be diminished. 

To the improvement of the condition of labour and land in the United 
Kingdom the abolition of the colonial system is essential. Its maintenance 
involves the payment of taxes to an amount that is terrific, all of which 
must be paid by the producers and those who own the machine of pro- 
duction, abroad or at home. The tax that is nominally paid by the man 
who sells the wheat, or by him who transports it, is really paid by the man 
who produces it, and by him that consumes it. Three-fourths of the nation 
are engaged in the work of transporting, converting, or exchanging the pro- 
ducts of others, adding nothing whatever to the quantity produced, while 
Jiving out of it, and thus deteriorating the condition of the land-owners and 
labourers of England and of the world. 

The land-owners of England have been the legislators of England. They 
made the system which produced our revolution — that which has depopu- 
lated India, and must ruin every country subjected to it — and they are now 
paying the penalty. Each step towards the degradation of the people by 
whom they were surrounded has been attended by loss of power in them- 
selves. Their policy has converted the little occupant into the hired 
labourer, and the labourers on land into the tenants of lanes and alleys in 
Liverpool! and Manchester. Throughout much of Scotland they have sub- 
stituted sheep for the men whom they have driven to take refuge in Glas- 
gow j and with each such step they have weakened themselves, converting 

* At a recent meeting in London, Dr. Buckland asserted that the product of all the clay 
lands of England might be doubled by a moderate expenditure for drainage. 

•j-The greatest crowding of population in a neighbourhood is in a district in Liverpool, 
England, containing a population of 8000 on 49,000 square yards of ground, being in the 
proportion of 657,963 to a square mile. 



THE HARMONY OF INTERESTS. 



133 



those who were their own support into the tools of those who Jive at the cost 
of both. The exchanger has set his foot upon their necks. Commerce is 
Xing. They are prostrate, and so they must remain until they shall have 
help from abroad. Their natural allies are the land-owners of the rest of the 
world. The East India Company, as the great land-owner of India, is 
greatly interested. That country is becoming daily less and less able to 
pay taxes, and the power so to do must diminish with the continuance of 
the system. Were the machinery now employed in converting cotton into 
cloth for India employed in making cloth in India, thus making a market 
on the land for its products, the culture of cotton would revive, the demand 
for food would increase, population would grow, and jungle would be cleared, 
and the Company mi^ht then obtain a constantly increasing rent from taxes 
constantly decreasing in their weight, paid by a people constantly improving 
in condition. The price of labour would rise, and the necessity for armies 
would diminish, and the Company might then, at no distant period, sell out 
its establishments to a people who would thereafter govern themselves. 

It is to the people of the United States, however, that they must chiefly 
look for help. Owners already of the chief part of North America, they are 
likely soon to own the whole. The national, not party or sectional, adop- 
tion of the protective policy would at once raise the value of land throughout 
the Union, because it would then be felt that a market would everywhere be 
made on the land for the products of the land. The British provinces would 
then speedily be incorporated into the Union, and the supply of food to 
British markets would cease; Cuba and Mexico would follow, and thus would 
be made a market for the population of all Southern Europe; and with each 
such step the value of labour would rise, followed by a necessity, on the part of 
the landholders everywhere, for an effort to retain their rent-payers, if they 
would preserve the value of their land. Spain and Italy would become manu- 
facturers for themselves, and thus the colonial system would gradually 
pass out, and with it the power of the exchangers over the labourers and 
land-owners. 

It is not by immigration alone that the population of the Union would be 
augmented, and increased value given to the land which so much abounds. 
The present system degrades the country to build up great cities, to be- 
come the resort of tens of thousands who would have remained at Jiome 
among parents and friends, had furnaces, rolling-mills, cotton or woollen 
mills afforded them employment for time and mind. The same cause 
compels another portion to fly to the West; and while, in the one case, 
we have the poverty, vice, and disease of crowded cities, in the other we 
have those of scattered population; and men, women, and children starve in 
New York, while other men, women, and children perish of fevers incident 
to the occupation of new countries in advance of the arrangements that 
would have resulted from the more gradual extension of the area of settle- 
ment. It will be said that here is discord. If the city population did not 
grow, what would become of the owners of city lots? The harmony of in- 
terests is here, as everywhere else, perfect. Towns and cities would grow- 
more rapidly than ever, but they would grow more healthfully, preserving 
a nearer relation to the population of the country, whose trade they desired 
to perform. New York would cease to be, as now, a great wen, absorbing 
all the profits of hundreds of thousands of the poor farmers, her customers, 
who give ten days' labour employed in raising corn for the labour of one 
day employed in producing British iron. The country and the city would 
grow together, and the jealousy of the country towards the city would 
speedily pass away. 

The people of China constitute a world of themselves. They have little 



134 



THE HARMONY OF INTERESTS.. 



intercourse with the exterior world, nor is the example of Hindostan likely 
to produce any desire for its extension: certainly not, while they shall con- 
tinue to recollect that their desire to prohibit the importation of opium in- 
volved them in a war that resulted in the destruction of cities and the ruin 
of hundreds of thousands of innocent people. The system of that country 
is directly the reverse of ours, in the fact that the government is in the hands 
of one, while here it is in the hands of all. In this, it labours under infinite 
disadvantage, yet the spectacle there presented of the results of combined 
action puts to shame our boasted civilization. A recent writer thus describes 
the condition of the people : — 

" The farms are small, each consisting of from one to four or five acres, indeed, every 
cottager has his own little tea garden, the produce of which supplies the wants of his 
family, and the surplus brings him in a few dollars, which are spent on the other neces- 
saries of life. The same system is practised in every thing relating to Chinese agriculture. 
The cotton, silk, and rice farms, are generally all small, and managed upon the same plan. 
There are few sights more pleasing than a Chinese family in the interior engaged in 
gathering the tea-leaves, or, indeed, in any of their other agricultural pursuits. There is 
the old man, it may be the grandfather, or even the great-grandfather, patriarch-like direct- 
ing his descendants, many of whom are in their youth and prime, while others are in 
their childhood, in the labours of the field. He stands in the midst of them, bowed down 
with age. But, to the honour of the Chinese as a nation, he is always looked up to by all 
with pride and affection, and his old age and gray hairs are honoured, revered and loved. 
When, after the labours of the day are over, they return to their humble and happy 
homes, their fare consists chiefly of rice, fish and vegetables, which they enjoy with great 
zest, and are happy and contented. I really believe there is no country in the world 
where the agricultural population are better off than they are in the north of China. 
Labour with them is pleasure, for its fruits are eaten by themselves, and the rod of the 
oppressor is unfelt and unknown."* 

l et this be compared with the results of the system that has desolated 
Ireland and India, and that drives our people to Oregon and California, 
while men are everywhere, among ourselves, half-cultivating large farms, 
when they might obtain treble the result from half the surface, and let it 
then be determined which is the one that tends most to promote the pros- 
perity and happiness of the labourer, and to improve the condition of the 
owner of land. 

The policy of England tending to dispersion, she desires to facilitate the 
making of roads by which all the commodities of the world may be brought 
to her, thence to be returned to the places from whence they came, retaining 
so large a portion as to cause the destruction of the land and its owner. 
Lower India is utterly exhausted, and England desires railroads to more 
distant points, which will be then exhausted in their turn. From 1834 to 
1840 she lent us iron to make roads in new countries, and we were ruined 
by dispersion. From 1843 to 1847, we filled up the spaces, the policy 
being that of concentration, and we grew rich. The present policy is that 
of dispersion. It is proposed to make a railroad to the Pacific, that men may 
scatter themselves more widely, although we now occupy a space that 
would be sufficient for almost the population of the world, if properly culti- 
vated. The more roads we make in the now-settled States, the richer and 
stronger we shall grow, and the greater will be the value of land. The 
more roads we make in yet unsettled lands, the poorer and weaker we shall 
grow, and the less will be the value of land. It behooves the farmer, 
then, to look carefully to every scheme for promoting dispersion. 

The value of labour and of capital is dependent on the quantity of both 
that can be given to the work of production. Every increase in the quan 



* Fortune's Wanderings in China. 



THE HARMONY OF INTERESTS. 



135 



tity of either required to be given to the work of conversion and transportation, 
tends to diminish the value of all. Every diminution in the quantity tends 
to increase the value of all. The nearer the consumer and the producer can 
be brought together, the greater is the quantity of capital and labour that can 
be given to the work of production, the smaller is that which is required 
for transportation, and the more rapid is the advance in the value of both 
labour and land. 

We are now separating the consumer from the producer, and the conse- 
quence is, that five per cent, stocks are at par, land is cheap, and wages 
are low. Were the tariff of 1842 re-enacted, interest would rise to six per 
cent, and labour would command a large return — the consequence of which 
would be a great increase in the consumption of food, and wool, and cotton, 
and the value of land would rise. 

The annexation of a million of people, emigrants from Europe, to our 
community, establishes free trade with them. The annexation of the land 
and the people of Canada, and the other British possessions, would enlarge 
the domain of perfect free trade. So would that of Cuba, Mexico, Ireland, 
or even England,* and free trade thus established would be beneficial to all, 
the annexers and the annexed. 

The people of the north would not object to the annexation of Canada, 
although such a measure could profit them but little. They and the Canadians 
are both sellers of food, and it is the superior value of wheat and flour on the 
south side of the line by which they are divided that induces the Canadians 
to desire to be brought within the Union. The people of the South would 
oppose the admission of Canada, although the eiFect of such a measure 
would be to convert the Canadians into large customers, instead of per- 
mitting them to remain small ones.t Once within the Union, the con- 
sumption of cotton in the British provinces would speedily rise from 
20,000,000 of yards, weighing 5,000,000 of pounds, to 30,000,000 of 
pounds, and thus would the planter gain a market for 50,000 bales of cotton. 
The material interests of the South would be promoted by the annexation 
of Canada, yet would the South oppose the measure on the ground of sup- 
posed danger to political interests. 

The South would advocate the admission of Cuba into the Union, although 
the effect of such a measure would, under existing circumstances, be that of 
ruining the cultivation of sugar, the only resource to which the planter 
now can look with hope — the only one that has enabled him to bear up 
under the late and present hopeless condition of the cotton culture. The 
man of the north would oppose the measure, although it would give him 
sugar at a cost far below the present one, and a market for grain and cloth 
that would absorb of both to a vast amount. Political interests are thus at va- 
riance with material ones. In both cases the discord is but apparent, while the 
harmony is real. The establishment of that real freedom of trade which 
results from the immigration of individuals, or from the annexation of com- 
munities, can never fail to be productive of benefit to all. 

The cotton planter, as we have seen, now sells his product in the cheap- 



• Irel ind and England are mentioned here only to show that the difficulty of having 

perfect free trade with them would be removed by the change in the value of labcui 
that would result from change of their political system. 

■j- Export to British North America in the first six months of 

1846. 1847. 1848. 1849. 

Plain calicoes . 7,483,318 7,339,686 6,745,536 5,979,991 

Prints « . . 8,483,163 6,497,845 4,589,811 5,701,857 



16,966,481 13,837,531 11,335,347 11,681,848 



136 



THE HARMONY OF INTERESTS. 



est market and buys his cloth and iron in the dearest one. He gives away 
the one, and is then unable to buy the other. By changing his system, and 
compelling the loom to come to the cotton, and the anvil to come to the food, 
he will sell his cotton and obtain his cloth and iron in exchange for 
labour that is now being wasted. He will then export cloth to all the 
world, and the necessity for resorting to the cultivation of sugar will cease. 
The people of the North will then consume all the sugar that Cuba can 
produce, and those of Cuba will require pounds of cotton where now they 
consume but ounces.* 

CHAPTER THIRTEENTH. 
HOW PROTECTION AFFECTS THE MANUFACTURER. 

The shipowner stands between the producer of cotton and his customers, 
and the larger proportion the quantity to be transported bears to the number 
of ships to do the work, the higher will be freights. We might thence suppose 
that his interest would be promoted by the pursuance of a course that 
would compel the cotton to go to the loom, and that he would be injured by 
the adoption of one requiring the loom to come to the cotton. Directly 
the reverse, however, as we have seen, "« the fact. The more the loom can 
be made to come to the cotton, the mor*. valuable are the services of men, 
the greater the number of men to be imported, the larger the number of com- 
modities that can be exported, and the larger the business for ships. 

The manufacturer, in like manner, stands between the producer and the 
consumer of cotton, and the larger the quantity of cotton to be converted 
compared with the machinery of conversion, the larger will be his charge 
for the use of his machinery. It might, therefore, be supposed that he 
would be injured by the adoption of measures tending to place the loom in the 
cotton-fields of the South, or on the coal-fields of the West, but the reverse 
is the fact. The more people make coarse cloth in the South and West, 
the more will there be to require fine cloth and silks from the East, and 
the greater the demand for labour in the one, the greater will be the requi- 
sitions made upon the other for the skill they have already acquired, with 
a constant increase of wages, and equally constant increase in the power of 
consuming food, cloth, and iron. The more they can make their exchanges 
at home, with men whose labour is valuable, the larger will be the equiva- 
lent received for their own labour ; and the more rapid the increase in the 
value of that of others, the greater will be the value of their own. Every 
measure tending to break down the monopoly of machinery tends to increase 
the value of man throughout the world, and none could have that effect to 
such an extent as would the transfer of the machinery of Lowell to the 
cotton-fields, to be replaced by other machinery of a higher order. 

But, it will be said, "The people of the South need no further protection 
than they now have. They are satisfied with 30 per cent., and why, if they 
can go on to manufacture without any increase of duty, should they impose 
higher duties on fine cloths and silks, for the benefit of the North and East? 
We know that the latter cannot make fine muslins at the present rate of 
duty — nor can they manufacture silk goods in competition with France. 
The South will work up its cotton and make its own exchanges, leaving the 
duty as it stands, and then Lowell, Lawrence, and Providence must go 
down, for competition is impossible." Such are the views perpetually pro- 
mulgated by journals whose editors profess great acquaintance wUh political 



* The export from Great Britain to all the foreign West India Islands is bu i little over 
20,000,000 of yards. 



THE HARMONY OF INTERESTS. 



137 



economy, and whose speculations are received as authority by their 
readers. Nothing 1 , however, could be less in accordance with the true in- 
terests of the planters. 

The larger the quantity of the machinery prepared for the conversion of 
cotton into cloth, the smaller will be the charge for its use. The planter 
requires to rid himself of a monopoly that limits the increase of that ma- 
chinery, and compels him to give to the owners of the little that exists, 
whether English or American, a share of the product entirely dispropor- 
tioned to its value as compared with that of the machinery required for pro- 
ducing his cotton. To break down one monopoly and establish another 
would not answer his purpose, and yet such would be the result at which 
he would arrive were he to pursue a course that would merely substitute 
Augusta for Lowell, or Graniteville for Lawrence. The man of the South 
would, and necessarily, do as he of the North now does, buy his cotton 
at the market price, as fixed in England, and sell his goods at the market 
price, as fixed in England, for until the quantity of machinery shall be 
so far increased as to prevent the accumulation of large stocks in England, 
the price must continue to be there fixed for the world; and so long as we 
shall continue to be compelled to go there for any portion of our supplies of 
cloth, the price of the whole will continue to be fixed by the cost of obtaining 
the last small portion. What the planter needs is that the price shall be 
fixed here, for both cotton and cloth, and that it may be so, he requires an 
increase of the quantity of machinery ready to do his work, and not the mere 
substitution of that of Southern men for that of Northern men. 

How indispensably necessary it is that they should do so will be obvious 
from an examination of the diagram given at page 75. It is there shown how 
enormous are the charges of the manufacturers when the quantity for cotton 
requiring to be converted bears a large proportion to the machinery for con- 
verting it. In the following table are given, 

First. The amount of the crop. 

Second. The prices of cotton in Liverpool, by which those of the rest of 
the world are settled. The dates taken are March, 1844, July, 1845, May, 
1846, and June, 1847. 

Third. The price of best mule twist, No. 2 per pound, at the same periods 
of time. 

Fourth. The price the whole crop, allowing twelve per cent, for waste, 
would yield, if converted into this description of yarn. 

Fifth. The yield to the planter, supposing the whole crop so sold, from 
which are to be deducted all the freights, charges, &c, between his plantation 
and Liverpool. 

Sixth. The amount retained by the manufacturer as his charge for con- 
verting cotton-wool into yarn. 

Year. Crop. Price. J™?^ Amount of twist Price of crop. 

1843- 4 815,000,000 6d. \0kd. ^31,000,000 £20,000,000 £11,000.000 

1844- 5 958,000,000 4 111 41,000,000 16,000.000 25,000.000 

1845- 6 840,000,000 4| 9| 30,000,000 16,500,000 13.500,000 

1846- 7 711,000,000 7 10£ 27,500,000 20,700,000 6,800,000 

If we deduct from the crop of 1846-7, the comparatively small sum 
required for the payment of freight, charges, &c, and from that of 1844-5, 
the large sum required for the same purposes, it will be seen how insignifi- 
cant is the return to the planter for a large crop compared with what he 
receives for a small one. 

In 1847, the manufacturer gave 7c?. and sold at an advance of about fifty 
per cent. — i. e. he charged half as much for converting the wool into yarn 

18 



THE HARMONY OF INTERESTS. 



as he paid for the wool itself. In 1845, when he paid 4d. he sold at nearly 
a shilling — i. e., he charged twice as much for the work of twisting the wool 
as he paid for the wool. He was enabled to do this, because of two 
reasons : — First, the machinery of conversion was disproportioned to the 
quantity of cotton to be converted ; and second, the market for cotton goods 
was extending itself, because the world was comparatively peaceful, and 
labour was being applied more productively than usual. The effect of the 
change that has since occurred will be seen from the following view of the 
operations of 1848. 

Crop. Price. P ^ of Amount of yarn. Amount of crop. Snvfrsio'n 

1847-8 940,000,000 4d. 8d. £28,000,000 £15,600,000 £12,400,000 

The machinery had been increased, but the market was gone. Wars, 
revolutions, and threats of war and revolution, had destroyed it. The 
planter had 4d. per pound, of which a large portion was swallowed up in 
the cost of transportation ; and the manufacturer obtained as much for twist- 
ing the wool into yarn as the planter received for raising, ginning and 
baling it, and for transporting it, first to the place of shipment, and thence 
to Liverpool, together with all the charges of the numerous persons through 
whose hands it passed on its way. 

The planter needs machinery adequate to the conversion of his crop, and 
also a market for it when converted. The failure of either is equally fatal 
to him. 

The first he cannot have under the monopoly system. It is one of mere 
gambling; and while a few make fortunes, the many are ruined. The 
distant few, already wealthy — the cotton-lords of England — are not the 
men to whom he must look to provide him with it. It is to himself, and the 
many like himself, at home. Fuel and iron ore abound in the South, and 
cotton fields furnish cheap sites for the erection of acres of factory, in which 
the product of thousands of acres of cotton could be converted by aid of the 
labour that is now wasted — the coal and the iron ore whose powers remain 
unused — the water powers that remain unimproved. By their aid, every 
pound of cotton now produced in the South, not required by Great Britain 
and others for their own immediate consumption, could be converted into 
yarn or cloth, and cheaply furnished to the world. The planter would 
then receive a yard of cloth for a pound and a half of cotton, instead of 
giving five pounds for one. 

The difference between the price of the crop of cotton, in Liverpool, and 
the price of yarn, also in Liverpool, in 1844-5,. would have exceeded a 
hundred millions of dollars, being twice the amount* that it would cost to 
place in the cotton fields of the South spindles for converting into yarn the 
whole crop that is now sent without the limits of the Union. 

He would then have yarn or cloth to sell instead of cotton, and then his 
crop would speedily rise to five millions of bales, for the labour and manure 
now wasted on the road would go upon the land. Capital now absorbed by 
brokers, ship-owners, and distant manufacturers, would be applied to the mak- 
ing of railroads, the improvement of the machinery of cultivation, the diffu- 
sion of knowledge, and in a thousand other ways tending to render labour 
more productive. Where, however, is he to find a market for his products, 
thus increased? 

Commerce is but an exchange of equivalents ; and if the supply of iron, 
silk, coffee, tea, and other commodities required by the planter, do not keep 
pace with increase in the supply of cotton, he will be constantly giving 



* See Plough, Loom, and Anvil, No. XIX., page 421. 
Vol. II.— 85 



THE HARMONY OF INTERESTS. 



139 



more Cotton for less iron or silk, and thus others will enjoy the whole ad- 
vantage resulting from his increased exertion. That the advantage may, as 
justly it should, be his, it is necessary that the production of the commo- 
dities that he desires to receive in exchange go on to increase in a manner 
correspondent with that which he desires to give. If it does so, he gives 
labour for labour. If it does not, he gives more labour for less labour. 

The question now arises: Can the production of the world, under the 
existing system, go on to increase in such a manner as to give to the planter 
a proper equivalent for his production ? The answer is to be found in the fact, 
that it has already failed to do so, and that he is even now obliged to abandon 
cotton for wheat and sugar. How, then, can it be expected to do so in 
future ? The average crop must speedily reach 3,000,000 of bales ; and, 
when it shall have done so, his condition will be worse than at present. 
The production of the world does not increase correspondingly with our 
own ; and until it can be made so to do, we must work at disadvantage, 
giving much labour for little labour. 

With all its immense mass of rich and unimproved land, the United King- 
dom produces little. It does not even feed itself. Tt has a little iron and 
coal to sell, but a demand for an extra hundred thousand tons of the former 
would greatly increase the price of the whole without producing any ma- 
terial increase in the demand for cotton ; for the rich iron-master would be 
made richer, while the poor miner would remain as poor as now. Great 
Britain has scarcely any thing to sell but services — not products. To her 
we cannot look for a market. 

Of the people of France, almost half a million of those most capable of 
working employ themselves in carrying muskets, and a large portion of the 
labour of the rest is employed in raising food for them and other non-pro- 
ducers, in making clothing for them to wear, and powder for them to burn 
They have, therefore, few products to sell, and, like Great Britain, they have 
little to offer in exchange but services. 

The people of Italy and India raise some silk, but the chief part of both 
are otherwise occupied than in labours of production; and so are they like 
to be, and they cannot increase their product to keep pace with ours. 
Germany maintains large armies, and produces little to sell. So it is with 
Spain and Portugal. Mexico has a little silver and cochineal: but the quan- 
tity does not grow, nor is it likely so to do. Look where we may, the power 
of production is not only small, but incapable of increase under existing 
circumstances, and unless a change can be effected, we cannot find markets 
for the products of our constantly increasing population. What is the re- 
medy ? It is to bring the people to the place where alone their labour can 
be made productive, and thus establish perfect free trade with them. 

Fifty thousand English miners and furnace men distributed among 
the coal and iron-ore fields of Pennsylvania, Ohio, Indiana, Tennessee 
and Alabama, would produce 600,000 tons of bar iron, to be exchanged 
with the farmer for his wheat, and the planter for his cotton, and the 
latter would then obtain a ton of the one for a bale of the other, instead 
of giving two or three for one. He could then make roads to go to market, 
and the labour of his people would become valuable, and they would con- 
sume five times the cloth they now consume, and thus would be made a 
double market for his cotton. 

The same number of Italians would raise quadruple the silk we now 
consume, and they would be large consumers of food and cotton. Were the 
market for silk once made here, we should in a little time raise as much as 
all the world beside, and consume almost all we raised. 

The planter and the farmer must make a market on the land for the 



140 



THE HARMONY OF INTERESTS. 



products of the land, by bringing here the people they desire to employ 
in the production of the commodities they require to consume ; or they must 
continue to give a continually increasing quantity of labour for a continually 
decreasing one. By adopting the first course, they would convert the con- 
sumers of one pound into consumers of twenty pounds, and the consumers 
of twenty pounds into consumers of forty pounds. By adopting the opposite 
policy — that now called free trade — they will convert consumers of twenty 
pounds into consumers of one. 

Were it now known in Europe that such was the fixed and unalterable 
policy of the nation, the present year would see the transfer of population to 
the extent of half a million of persons, and of capital, in the form of ma- 
chinery, to an incalculable extent ; and once here, here they would stay, in- 
creasing at once, and immensely, the market for both food and cotton. Five 
years would scarcely elapse before it would reach a million ; for with every year 
the power to obtain food, clothing, and the machinery for profitably applying 
labour, would increase, offering new inducements for the transfer of both 
labour and capital. With each year, the desire of our neighbours, north 
and south, to enter the Union would increase, and but few would elapse 
before it would embrace all North America, and a population of forty or fifty 
millions of people, themselves consuming far more than all the cotton we now 
raise. The Canadian, in the Union, would find his labours trebly profitable, 
for he would obtain treble the iron and cloth in return for less exertion. 
The mines of Nova Scotia and New Brunswick would give forth their 
treasures in return to the labour of men who now can consume but little food 
or clothing, but would then have power to consume much. The mines of Mexico 
would be made to yield three dollars where now they yield but one ; and 
all would obtain silver, gold, iron, lead, cloth, and all other of the necessaries, 
comforts, and luxuries of life, at diminished cost of labour. 

With each step of this progress there would be increased demand for the 
labour, both physical and mental, of the manufacturers of the North, for the 
demand for fine cloths and for silk would grow with the growth of the power 
to produce coarse cloth and iron; the demand for fine books would grow 
with the increase of school-books and newspapers ; and the demand for cotton 
and woollen machinery would grow with the increase in the power to obtain 
railroad iron. 

Between the manufacturer and the planter there is, therefore, perfect 
harmony of interest. All are alike interested in the exertion to shake off 
the load imposed upon them by the present monopoly of machinery ; but 
of all the agriculturist is most interested. Its tendency is to reduce the power 
of production throughout the world, to diminish the power of consumption, 
and thus to destroy the customers of both planter and farmer. The 
tendency of protection is to raise the value of labour throughout the world, 
by increasing the estimation in which man is held abroad, and thereby to 
augment production and the power of consumption. With every increase 
in the tendency to fly from Europe, it would be felt more necessary to 
endeavour to keep the people at home. By that process, and that alone, 
will the labourer of the world be raised to a level with our own. 



THE HARMONY OF INTERESTS. 



141 



CHAPTER THIRTEENTH. 

HOW PROTECTION AFFECTS THE CAPITALIST. 

If protection be "a war upon labour and capital," it must tend, by les- 
sening the productiveness of labour, to prevent its proper employment, and 
thus to diminish the power of accumulating wealth by the clearing, drain- 
ing, and enclosing of lands, the building of houses, the construction of roads 
and bridges for facilitating transportation, and of machinery for converting 
the products of the earth into the form required to fit them for the use of man. 
If, on the contrary, it be really, as its name imports, protection to the labourer, 
then must it increase the power of accumulating wealth, to be used for 
increasing his productive power, and thus facilitating the accumulation of 
further wealth. 

The great machine of production is the land. The more time and mind 
that can be given to its cultivation, the more rapid will be the increase of 
production, the larger will be the return to capital, and the more rapid the 
improvement in the condition of man. 

The more time and mind that must be given to the preparation of ma- 
chinery of transportation, the slower will be the increase of production, the 
smaller will be the return to capital, and the slower the improvement in the 
condition of man. The object of protection is that of bringing the consumer to 
take his place by the side of the producer ; thus saving transportation, and 
facilitating the application of labour to production, while diminishing the 
number of persons among whom the produce is to be divided. 

A furnace, capable of producing 5000 tons of iron per annum, may be 
put in motion at a cost of $30,000. These 5000 tons would exchange in 
Ohio for 150,000 bushels of wheat, the produce of 12,500 acres of land that 
has cost $40 dollars an acre, equal to $500,000, for the labour employed 
in clearing and draining it, in making fences, building barns, houses and 
doing all other things necessary to fit it for production. Let us suppose the 
furnace, houses for the men, preparation of the mines, &c. to have cost 
$100,000, and yet the capital employed is five to one, to obtain precisely 
the same return. This, however, is not all. The wheat weighs 4000 tons, 
and to transport this to New York and thence to Liverpool requires more 
capital in wagons and canal boats than would have been required to produce 
the iron at home; and far more capital employed in ships than would have 
done it ; and thus we have a total of seven or eight, if not even ten times the 
capital that is needed, while the return is precisely the same — 5000 tons of 
iron. 

The capital invested in building the furnace, the houses, and in preparing 
the mines, would have been permanent, and it would have given value to 
every acre around, because it would have made a market on the land for 
the products of the land, whereas, the wagons, ships, and canal-boats disap- 
pear with time ; and the land, constantly cropped, becomes exhausted, and 
is frequently abandoned by the owners, and thus is the whole wasted. 

The farmer will say that he could have obtained no more iron on the spot 
for the produce of his land, that the iron-master paid him for his wheat and 
charged him for his iron according to the price in Liverpool, and that he 
profited as much by exchanging in the one place as in the other. This is too 
nearly true. So long as he is compelled to compete with the inferior labour 
of Europe, so long must he accept this as a consequence. So long as he is 
dependent on England for a market for a single million of bushels of wheat, 
she will fix the price of all that is produced ; and so long as he is dependent 
on her for the last few thousand tons of iron, she will fix the price of all that 



142 



THE HARMONY OF INTERESTS. 



is consumed. He needs to bring the home consumption of food up to the 
production, and the home production of iron up to the consumption, and 
the price of both will then be fixed at home. A little capital will then yield 
much iron. Now, much capital is required to produce little iron. 

It has been shown (page 74,) that the whole of the cotton, 311,000,000 
of pounds, consumed by the people of Great Britain and Ireland in 1845 
and 1846, would have been paid for by 6,250,000 pieces of plain cottons, and 
210,000 tons of iron, delivered in Liverpool. By the time this cloth and 
iron reached the plantation they would have shrunk into 5,000,000 pieces 
of cloth (120,000,000 of yards) and 160,000 tons of iron; and perhaps into 
a still smaller compass, even supposing them imported duty free. To have 
produced this 120,000,000 yards of cloth in those two years would have 
required 20 mills of moderate size, each capable of converting into cloth 
2000 bales of cotton, and to have produced this iron would have required 
little more than two establishments, such as the one described at page 42, 
as existing in the Lehigh region of Pennsylvania. 

To transport the 700,000 bales of cotton must have required 60 ships, 
e-ach carrying 2000 bales, and making three voyages a year. Add to these, 
steamboats, warehouses, packing-machinery, &c, on this side of the Atlan- 
tic, and the docks, drays, warehouses, cars, railroads, &c. on the other side, 
and it will be found that the capital required for the work of transporting 
these 311,000,000, after they had reached the place of shipment, was 
three times more than would have furnished machinery that would 
have enabled the planter to convert the whole of them on the spot. For all 
this the planter pays, and therefore it is that we find him to have sent away 
311,000,000 of pounds of cotton, to be exchanged in Liverpool for 74,000,000 
of pounds in the form of cloth, and then to be reduced to 60,000,000 by 
the time they arrive on the plantation, thus giving five pounds of cotton for 
one yard of cloth. It is obvious that, even thus far, much capital is required 
to obtain small product. 

Let us now see what was the amount employed by the planter in produc- 
ing, at the place of shipment, the 250,000,000 of pounds that he gave in those 
two years to the people of England, for twisting and weaving the 60,000,000 
that came back in the form of cloth. The annual average is 155,000,000 sent 
out, and 30,000,000 returned, 125,000,000 being lost on the road. The ave- 
rage product of cotton land is under 300 pounds an acre, at which rate 416,000 
acres would be required for the production of the 125,000,000, saying nothing 
of the remainder of the various plantations not under cultivation. The average 
amount of labour, per acre, required to fit these lands for production, includ- 
ing fencing, houses, machinery, gin-houses, roads, &c, has not been less 
than one hundred days, and I should be safe in putting it much higher. 
Estimating those days at only 50 cents each, we obtain $50 as the actual 
expenditure required for each acre of land, at which rate the capital in land 
would be $20,800,000. Estimating the hands employed at no more than 
the land, we have a further sum of $20,800,000. Next, we have the capital 
employed in transportation to the place of shipment, and that some idea 
may be formed of that, I give the following statement, by one who furnishes 
it as the result of his personal observation: — 

« Of the expense of this first movement, some idea may be formed by those who have 
seen it coming over dreadful roads, up to the hub, dragged slowly along 20, 30, or 40 
miles, as we have seen it coming into Natchez and Vicksburg, hauled by five yoke of 
oxen carrying 2800 to 3000 pounds, and so slowly that motion was scarcely perceptible. 
So many perish in the yoke in winter and spring that it has been said, with some exag- 
geration, that you might walk on dead oxen from Jackson to Vicksburg. That was be- 
fore the railroad was made. A wagon is loaded up, say 14 miles from Natchez, and 



THE HARMONY OF INTERESTS. 



143 



started at night, and reaches there in time to get back the next night time enough to "load 
up." Thus ten oxen have been wearing and tearing and dropping their manure on the 
road for 24 hours to make one load.''* 

Here we have five yoke of oxen transporting 3000 pounds in a day, a dis- 
tance of only fourteen miles. Supposing the average distance to be 75 miles, 
and the roads to be similar, it would take them, on an average, a week to 
transport that quantity from the plantation to the place of shipment. I will, 
however, suppose that a single yoke of oxen can transport four bales, or 
1800 pounds, per week. The number of loads would be 70,000, to be 
transported in the shipping season, which averages about eight months. To 
do this would require, always on the road, 

2300 wagons, average cost $80, . . . $175,000 
4400 oxen, " " $40, . . . 175,000 

2200 men, « " $600, . . . 1,320,000 



1,670,000 



Total capital, .... $43,270,000 

This is a very low estimate of the fixed labour, called capital, given to the 
production at the place of shipment of these 125,000,000 of pounds of cotton. 
Let us now see how much is the fixed capital, the use of which is given by 
the distant manufacturers in exchange for all this. A mill that will work up 
2000 bales of cotton can readily be produced at a cost not exceeding 
$100,000. These 2000 bales contain 900,000 pounds of cotton. Thirty-four 
such mills would work up 30,000,000 of pounds, and the cost of all these 
mills would be $3,000,000, or about one-fifteenth of the capital employed by 
the planter. Need we wonder that the planter's capital yields him a small 
return ? 

The more directly power is applied, the more efficiently it is applied. 
The more machinery that intervenes, the less is the power and the smaller the 
effect. The planter obtains his cloth and iron by the indirect means of 
raising cotton and food to send abroad, whereas, if he would apply his power 
directly to the production of both, production would be doubled and his 
power of accumulation quadrupled. Had the planters of 1845 and '46, pro- 
vided themselves with machinery for the conversion of cotton into cloth, to 
the extent of the 155,000,000 consumed in England, they would have seen 
furnaces rise among them capable of producing treble the iron they could 
have obtained for that cotton, and thus would have been made a market on the 
land for the products of the land, the result of which, would have been that 
they would have obtained far more for the balance of their crop than they 
did obtain for the whole. The produce of those 155,000,000 would then 
have bought them iron sufficient to make many hundred miles of railroad, 
and thus, while diminishing their necessity for resorting to distant mar- 
kets, they would have increased their power so to do, by increasing their 
capital. It will be said, however, that while the labour employed in pro- 
ducing the cotton is set down, there is no allowance for that required for its 
conversion into cloth. No such allowance is needed. The labour of men, 
women, and children, now absolutely wasted in every county of the South 
is more than would be required for five such mills, and the cotton that is 
lost for want of aid in harvest-time would twice over pay for it. 

The whole of those 125,000,000 of pounds of cotton consumed by the people 
of Great Britain and Ireland was thus absolutely wasted, and therefore it was 



• Skinner's Journal of Agriculture, Vol. ILL, p. 483. 



144 



THE HARMONY OF INTERESTS. 



that the planter obtained one pound of cotton in exchange for five. Could the 
charges be saved that now intervene between the planter on one side, and 
the spinner and weaver on the other, he would obtain two pounds of cloth 
for three of cotton, and to acomplish this there is but one mode of proceed 
ing, and that is to persuade the machinery to come to the cotton, and thu? 
obviate the necessity for sending the cotton to the machinery. At present, 
we seem to be pursuing the same course that would be pursued by the 
man who should expend hundreds of thousands of days of labour in clearing 
and cultivating land for the production of wheat, and then wasting two- 
thirds of it on the road to and from the distant mill, for want of the applica- 
tion of three or four thousand days of labour to put up a mill on his own land. 
A grist-mill costing 5,000 days of labour will grind all the grain produced 
upon land that has cost 300,000, and perhaps 500,000, days of labour to 
place it in its existing condition; and yet the man above referred to, would 
waste on the road annually more days than would build such an one. 
So it is with our planters and farmers. We see in every little com- 
munity that mills speedily rise for the conversion of grain into flour, 
and are satisfied with one-eighth toll; and so we see in every neighbour- 
hood, where there are timber and a little water-power, saw-mills are got up 
for converting lumber into boards ; and with each such operation, flour and 
boards are obtained at less cost *)f labour, and the farmer has to give less 
of wheat, and of timber, to have them converted into flour and boards. What 
would the wheat-grower say who should have to give five bushels for get- 
ting one back in flour* — and what should the cotton-grower say to getting 
back one bale of cotton in the form of cloth ? Let him reflect on this question, and 
then answer the following one : Why should not every community of some- 
what larger size have in like manner its own place for converting cotton 
into cloth ? Could that be done, the planter would obtain half the cloth 
yielded by his cotton. 

The latter will at first view^ probably deny this. He will say: If I sell 
my cotton to go to Manchester, it will produce me five cents. If I sell it to 
the manufacturer on the ground, he will give me no more. If I buy Engnsn 
cloth, it will cost me ten. If I had a manufacturer on the ground, I should 
pay the same. Such must be the case so long as he shall find himself 
compelled to compete in the market of England with the poor Hindoo for 
the sale of his cotton, and compelled to purchase there, a part of his supply 
of cloth, for so long will the prices of both be fixed in Liverpool. With every 
step in the progress of emancipation, however, he would find himself k 
gainer. Let him look around and see how much of the labour of his neigh- 
bourhood and of his own plantation is wasted for want of the demand that 
would be produced by the vicinity of the factory ; and then let him reflect 
upon the advantage to be derived from having, in that factory, a place of 
employment throughout the year, of the persons who might, in case of need, 
aid him in his picking, and thus save for him the labour that is now lost on 
cotton wasted in the field, or overtaken there by frost. Let him consider 
these things, and he will probably find that the loss in them alone is equal 
to the value of the labour required for the conversion of all the cotton of the 
neighbourhood into yarn. If they could be saved, and he could thus, with 



* " In some places in Virginia — in Rappahanock, for instance — the farmer does pay as 
much as one barrel to get four transported to Fredericksburgh, apparently not stopping to 
calculate at what price and what yield per acre that becomes a losing game, and appa- 
rently not reflecting, that while they pay 25 cents for transporting one dollar's worth of 
wheat they could transport the same weight, or fifteen dollars' worth of wool — or $7 50 
of cheese, or $18 worth of live beef — at the same cost!'' — Ibid. 



THE HARMONY OF INTERESTS. 



145 



the same labour, send yarn to market instead of cotton, he and his neigh 
bours would be great gainers by the operation. 

Having done this, let him look to the price at which he sells his corn, and 
see what would be the difference to him if he had a market on the ground 
in consequence of the conversion of some of his neighbours into mechanics, 
mill operatives, &c. Instead of remaining poor on the produce of little 
pieces of land, they would obtain good wages, and consume double their 
present quantity, while producing none. He would at once save much of 
the cost of transportation. He would sell food at home instead of having 
to buy it, with cost of commissions and transportation from his own neigh- 
bourhood added to it to increase its price, at Manchester or Lowell, and all 
would be great gainers by the operation. 

Let him then look to his cleared land, and study what would be its value 
if all the manure yielded by his hay, and oats, and corn, and fodder, went 
back upon the land, instead of being wasted on the road, and if all of that 
yielded by his wheat and corn remained upon the ground instead of going 
to Lowell or Manchester, and see if he would not be a gainer by the 
operation. 

Let him then look to his uncleared land, and calculate how much it would 
cost him to destroy the timber. Let him then calculate the value of the 
timber, if the factory were near him, and if the blacksmith and the shoe- 
maker, the hatter, and the tanner, the bricklayer and the carpenter, needed 
houses ; and if a town were growing up around the mill, and its inhabitants 
wanting pork and meal, and milk, and beef, and flour, and potatoes, and 
mutton, and see if he would not be a gainer by the operation. 

Let him look to the quantity of land upon which this timber stands, and 
on which he is paying, or losing, interest. Let him then look to the quality 
of that land, and compare it with that which he now cultivates. Let him calcu- 
late how many bushels of potatoes it would yield, and compare their value, 
when consumed upon the ground, with that of the 300 pounds of cotton 
now yielded by an acre, and see if he would not be a gainer by the 
operation. 

Let him add all these things together, and see if he would not save all 
the freights and commissions ; even although he obtained no more for 
his cotton, and paid as much for his cloth. Let him see if he would not 
obtain the full value of his cotton, instead of, as now, obtaining but one- 
third of it. 

The great cities and towns of the world are built up out of the spoils of 
the farmer and planter. Looking around in New York, or in Philadelphia, 
or Boston, it is not possible to avoid being struck with the number of per- 
sons who live by merely exchanging — passing from the producer to the 
consumer — producing nothing- themselves. Wagons and wagoners, carts 
and cartmen, boats and boatmen, ships and sailors, are everywhere carrying 
about cotton, and wool, and corn, and wheat, and flour, as if for the pleasure 
of doing it. The man of Tennessee sends his cotton to Manchester to be 
twisted. His corn goes along with it, to feed the man who twists it. It 
leaves him worth twenty cents. By the time it is consumed by the Man- 
chester spinner, it is worth, perhaps a dollar. The labourer buys it at that 
price. The manufacturer gives him a dollar to pay for it, and he charges 
it to the cloth at $1 10. The corn and cotton become cloth, and the Ten- 
nessee man buys it back, paying Jive bales for one! He can sometimes 
send his corn, but he can never send his potatoes, and the reason why he 
cannot is, that they are of the class of commodities of which the earth yields 
so largely that they will not pay freight. The only things he can raise for 
market are those of which the earth yields little, and that will therefore pay 



146 



THE HARMONY OF INTERESTS. 



freight. He raises three hundred pounds of cotton, all of which goes to market, 
bringing him back but sixty fashioned into cloth ; returning nothing to the 
land of what it drew out of the land, whereas, if he had consumers near 
him, he would raise almost as many bushels of potatoes, the manure for 
which would go upon the land to enrich it, and make himself rich. He 
could then afford to clear, and ditch, and drain, and cultivate the richest 
land, now covered with timber, or with water. 

Why does he not do these things? Why does he not convert the un- 
profitable consumers, everywhere around him, into profitable ones?* Why 
does he continue, year after year, to send his grain, or cotton, to the distant 
mill, instead of bringing, once and for ever, the mill to him ? The reason 
may be found in the newspapers every day. Two years since, cotton manufac- 
turers, wool manufacturers, and iron manufacturers were prosperous. Now 
they are all stopping work. Many are already ruined, and many more 
are likely so to be. Why is this? Does it arise out of any change in our 
own affairs ? It does not. It arises out of changes abroad. Two years 
since, England made railroads, and consumption then was large. This year 
she does not make roads, and consumption is small. Two years since, we 
built factories and furnaces. This year, manufacturers and furnace-builders 
are ruined. All of them would be ruined, had they not a Tariff of pro- 
tection, inadequate as is that of 1846, to give them that protection that is 
needed to secure them against such changes. Prosperous they would now 
be, had the tariff of 1842 remained unaltered; and the thousands em- 
ployed in them would have remained profitable customers for the farmers, 
instead of being driven over the country to become the rivals of the farmer, 
increasing the quantity of provisions, of which there is already a redun- 
dance. 

The capital employed in the transport of cotton is more than would build 
mills to convert the whole crop into cloth. The mill is saved labour. The 
transportation is labour lost, never to be regained. The mills once built, 
the whole of that labour might be applied to the work of production, for 

* The following picture of some of these unprofitable consumers is from a letter to the 
correspondent of " The New York Herald:" — 

41 1 travelled yesterday over a public road twenty miles, and stopped at nearly every 
house. They were occupied by what are called ' the poor white people.' I found fifty 
log-houses on my route. You pass through a forest and come to cleared land. You see on 
one side of the road a field of corn, say five to ten acres ; off a few rods back from the road, 
amid this corn stands a log cabin, the smoke curling up in blue wreaths even in these 
hot days. There is a wicket gate opening from the road, through which you pass and 
follow a footpath until you reach the entrance of the cabin. There is a stone for a step, 
and you enter. The woman is spinning. She asks you to a seat, which is made of 
nickory, both uprights and the seat. There are two or three more like it. In the corner 
of the room is a bed ; the fire-place is very large, and the chimney is built of mud outside 
the hut. There are some nails for hats and clothes. There is a rifle on wooden pins; a 
shelf, with a few articles upon it, consisting of a broken comb, a Bible printed by the 
American Bible Society, and a case-knife. In a corner is a barrel. Look into it, and you 
will find a half bushel of corn meal inside, and over it, on a string, is a piece of bacon. 
There is a cupboard in the corner; open that, and perhaps you will find a cup and saucer 
and a plate, and perhaps you won't. This a picture from the life. You ask for the 
family — ' My man is pulling fodder.' 4 How many children have you?' ' Six ;' and by 
and by you will see the whole half dozen flaxy-headed children peeping in through the 
crevices of the hut, for in the summer season, as there are no windows, the filling in be- 
tween the logs is taken out for air. You wonder how people can live in such a one-room 
den. Yet they do live, and get on very well. They keep a cow sometimes, a few pigs 
to make ham and bacon, and they raise corn, wheat, and oats. The cabin is worth twenty 
dollars, if it was to be bought." 



THE HARMONY OF INTERESTS. 



147 



the lost labour of the hands upon the plantation, and of the " poor white 
people," everywhere throughout the South, is more than would be required 
for the work of conversion. Protection seeks to enable the planter to save 
this labour and accumulate capital. 

It is said to be " a war upon labour and capital ;" but it would here cer- 
tainly seem to be, what its name denotes, protection to the producer of food 
and wool against a system which compels him to give the use of fifteen dollars 
of capital in exchange for the use of one. Its object is that of promoting con- 
centration. That of the system falsely called free-trade is to promote dis- 
persion. The last twelve months have witnessed the expulsion of many 
thousands of men, and many millions of capital to California, not one-tenth 
of which will ever return. One of the papers of the day states that 

« Considerable excitement has been created here (New York) among those who have made 
shipments' of merchandise to California, by the receipt of letters from commission houses 
in San Francisco, containing account of sales. It appears that the charges have, in several 
instances,- used up entirely the proceeds of the sales. We hear it stated in dry-good cir- 
cles, that one of our largest auction-houses sent out over two hundred thousand dollars' 
worth of dry-goods last winter, for which, up to this time, they have received no proceeds." 

Hundreds of ships are now in the Pacific, doing nothing and earning 
nothing, when they might be carrying cotton, and we are now building 
other ships to replace them. The capital now invested in those ships and 
in California would have built mills for the conversion of half the cotton of 
the South, and furnaces for the production of as much iron as is produced in 
Great Britain. For all this waste of capital the farmer and planter pay, for 
the harmony of interests is so perfect that the losses of the ship-owner and 
manufacturer are invariably borne, in largest proportion, by them.* 



* The following estimate of the quantity of labour and capital lost by ourselves and 
wasted in California, is from the New York Herald, and is not far from the truth : — 

" It is estimated that about 500 vessels had, up to the 1st of November, arrived at San 
Francisco, from the United States and Europe, and that at least 100,000 people were, at 
that time, in California. The average cost of outfit for each person cannot be less than 
$200, which makes an aggregate of $20,000,000. It will cost an average of at least $300 
per annum for each to live. This amounts to $30,000,000. This makes a total of 
$50,000,000, for the bare outfit and provisions for one year. The 500 vessels which had 
arrived, at the latest date, and the 500 on the way, are worth, on an average, about 
$10,000 each, which amounts to $10,000,000. The time of each individual we estimate 
to be worth, on an average, $200 — total, $20,000,000. Grand total of outfit, cost of living 
one year, cost of vessels engaged in the trade, and value of time one year, $80,000,000. 
This is a moderate calculation, as the actual outlay and absorption of capital, up to this 
time, will probably amount to full $100,000,000. As an offset to this we have thus far 
received about six millions of dollars ($6,000,000) in gold dust, from California and the 
whole Pacific coast. It will be perceived that there is still an enormous balance against 
California, and that it will be a long time, at the rate already realized, before we shall 
receive even the sum expended, to say nothing about profits. It is our impression that 
most of those engaged in the trade would be satisfied with merely the cost of their ship- 
ments. Most of them have abandoned all idea of profits, and many of them will never 
realize a cent : the charges, such as freight, storage, &c, will eat up every mill of first 
cost. The only product of California, to pay for this immense amount of property, is gold. 
At present it has no other resource, and we know of none but its minerals. It is now a 
little more than twelve months since the emigration to California commenced, and there 
has never been known, in the history of the world, such a movement as has been pre- 
sented in this. Independent of the hundreds of vessels which have departed from all 
parts of the world for California, we have nearly a dozen of the finest steamships in the 
world, regularly employed in carrying passengers and the mail between this port and 
San Francisco, via Chagres and Panama. Several large steamers are now on the way 
round, to take their place in the line from Panama to San Francisco, and in a short time 
we shall have two or three more on the line between this city and Chagres."' 



148 



THE HARMONY OF INTERESTS. 



The landowners of the world are the great capitalists. The exchangers 
are the small ones, and yet they and their machinery absorb the chief part 
of the products of the land, which therefore yields but small return to the 
labour employed in its preparation for production. Almost everywhere 
throughout this country it is of small value, rarely exceeding the cost of 
fencing and buildings. That it may be otherwise, and that landowners may 
grow rich, it is required that they bring the loom to the cotton, and the anvil 
to the food, instead of sending the mass of cotton and food, year after year, 
in search of the loom and the anvil. 

How rapidly their capital is capable of accumulating is a lesson that the 
mass of the farmers and planters of the Union have yet to learn. The first 
settlement of land involves a large amount of labour; but here, as in many 
other cases, it is the first step that is the most costly. The land cleared, 
the farm enclosed, the house built, and the road made, the cost of transporta- 
tion still absorbs so large a portion of the product that the whole has little 
value. The making of a railroad doubles it, but the quantity of cloth or 
iron that can be obtained for wheat or cotton is yet so small that the land 
has still but little value. To bring the furnace or the cotton mill to the spot, 
and thus to make a market on the land for the products of the land, requires 
an amount of labour that is absolutely insignificant compared with the 
amount already expended, and yet it doubles the value of all around. The 
sole cause of the difference in the value of land anywhere — quality being 
equal — is to be found in the proximity to, or distance from, market. 

Let us now suppose that during the last twenty years Ave had annually 
appropriated a small part of the labour that has been wasted on the road, 
and a small portion of the food and cotton that have been lost in distant mar- 
kets, to the building of furnaces and the erection of cotton mills, and that 
the Southern States now possessed a hundred of the former, each capable 
of producing 5000 tons of iron, and rolling mills to convert it into bars, and 
the latter capable of Converting into cloth 500,000 bales of cotton, and that 
the spare labour of their hands had been employed in grading roads upon 
which they had been for years laying the bars produced in their own fur- 
naces and mills, and see what would be the result. Throughout the whole 
South there would have been a market at hand for a large portion of their 
products, while every part would be enjoying facilities for transporting its 
surplus food or cotton to distant markets at one-fifth of the present cost, and 
thus the land of every part would have been acquiring value, to an extent 
almost incalculable. The planting States have 400,000,000 of acres, and 
the addition of ten dollars an acre to the present value would amount to 
four thousand millions of dollars, while the cost of building furnaces, rolling- 
mills, and all other of the machinery necessary to have covered those States 
with roads, and filled them with machinery to enable them to convert into 
cloth as much cotton as would free them from all dependence on the move- 
ments of distant markets, making them independent, would not have been 
fifty millions, and yet, large as it may seem, the return would have been an 
augmentation of capital counting by thousands of millions. 

An addition of one dollar an acre in the annual value, or rent, of a plan- 
tation, would add more than ten dollars an acre to its value. The farmer 
now sends his corn to market and brings back twenty cents, yet the con- 
sumer pays fifty. He brings back iron that costs him 300 bushels per ton, 
yet the producer of that iron obtains but 25. Had the iron and cotton 
manufactures been allowed to develope themselves throughout Virginia, 
Tennessee, Alabama, and other of the Southern States, 60 bushels of corn, 
or half a bale of cotton, would this day pay for a ton of iron, and if that were 
the case, what would now be the value of land? Would it not be greater 



THE HARMONY OF INTERESTS. 



149 



than at present by more than twenty dollars an acre ? If so, would not that 
amount to eight thousand millions of dollars 1 It is almost inconceivable 
how trivial is the amount of capital required to double, treble, or quadruple 
the value of land, after the first and most expensive process, that of the first 
occupation, has been performed. 

Let us now look to the state of things in England. The great field of 
employment for capital is the land. The number of acres in the United 
Kingdom is sixty-four millions. An expenditure of labour to the extent of 
only twenty shillings per acre would absorb the enormous sum of three 
hundred millions of dollars, and an average of three guineas per acre would 
absorb one thousand millions ; whereas the whole capital employed in the 
cotton manufacture is but thirty-four millions of pounds,* or about one hun- 
dred and sixty millions of dollars, and that invested in shipping is but little 
more. Now, if we suppose one-half of the cotton machinery to be for 
the domestic trade, and the other half for the foreign, and one-half of the 
navigation to be for home purposes, including the procuring of tea, coffee, 
sugar, silk, &c, for the home market — and the other half to be for other 
purposes, the result will be that the market for capital provided by the fo- 
reign trade is but one-sixth of what would be required for agriculture, at 
only three pounds per acre. If we take the average duration of ships and 
machinery to be ten years, we have an annual demand by the foreign trade 
for three millions only, being equal to less than one shilling per acre an- 
nually invested in the improvement of land. No one who is familiar with 
the condition of Irish agriculture, and of a large portion of that of Eng- 
land and Scotland, can doubt that the expenditure of twenty times that amount 
in the gradual improvement of cultivation, and in the improvement of com- 
munications would be attended with a large return. Land, however, is 
everywhere centralized in the hands of great owners, and cultivated by 
great farmers ; and the consequence is, that capital does not find employ- 
ment in its improvement, and has to seek a vent in manufactures and com- 
merce, which, together, afford a field so small, that competition is great 
and the rate of profit is very low. 

The savings of Ireland are forced into England, because of the absence 
of all modes of local investment. From 1821 to 1833, no less than ten 
millions of pounds were thus transferred; and later statements show that the 
course of events from that time to the present has been nearly the same. 

Of the deposits in the Scottish banks, a large portion is habitually invested 
in the funds ; and thus, local investment being prevented, there is a constant 
pressure upon the centre, which deprives the capitalists, great and small, of 
remuneration. 

The natural consequence of this absence of facilities for applying capital 
at the places at which it is owned, is the accumulation of large quantities 
in London, for which a market is to be sought at low rates of interest. 
Foreigners are then invited to borrow money — that is to say, to buy cloth 
and iron on credit? — and then when by this process the unemployed capital 
has been scattered to different parts of the earth, there comes a crisis, 
and the debts are called in, with bankruptcy!*) the debtors of England, 
and wide-spread ruin among the merchants of England. Such is the his- 
tory of the period from 1835 to 1842, ending in bankruptcy and repudia- 
tion. Such is the history, so far, of the tariff of '46. We have bought 
from thirty to forty millions of dollars of goods on credit, and the day of 
payment must come. 

By a succession of operations of this kind all the customers of England 



• McCulloch's Statistics, Vol. I. p. 78. 



150 



THE HARMONY OF INTERESTS. 



had been ruined, and there remained, in 1842, no foreign country that could 
be trusted. Capital appeared superabundant. Interest was very low, and 
there appeared no prospect of improvement. Every thing was prepared for 
a great home speculation, and the railroad soon became the hobby of the day. 
It was a great lottery, in which peers and paupers, bankers and half-pay 
officers, clergymen and pickpockets, bought tickets, all certain of drawing 
prizes. Five thousand miles of road have been made, at a nominal cost of 
£148,000,000,* but the larger portion of this vast sum has been merely a 
transfer from the pocket of one gambler into that of another, as may be seen 
from the following statement. The mere Parliamentary expensest of the 
Blackwall railway amounted to, . . . per mile, $70,000 

Those of the Manchester and Birmingham to " 25,000 

And those of the Eastern Counties' road to " 23,000 

The amount allowed for land by the Manchester and 

Birmingham, was " 80,000 

Eastern counties " 75,000 

In this manner, the cost of the works executed was swelled to $250,000, 
$300,000, $400,000, and in one case to $1,400,000 per mile, the conse- 
quence of which has been that while the designing few have been enriched, 
the many have been ruined, and England is covered with the wrecks of this 
disastrous speculation, which owed its existence to the fact that the whole 
policy of the country tended to force capital into commerce and manufactures, 
which afford the smallest field for its employment, and to drive it from agri- 
culture, the only one that affords a field constantly enlarging, and in which 
an almost unlimited amount of labour and capital might be employed at a 
constantly increasing rate of return. 

The manner in which the system operates upon the moneyed capitalist here 
is now to be examined. In 1835, as we have seen, the natural outlets for capital 
Mere closed. We ceased to build mills, furnaces, or rolling-mills, and the 
building of ships and houses was diminished. The necessary consequence 
of this blocking up of capital was, that the price of dividend-paying stocks 
rose, and this produced a desire to create new stocks with the then idle ca- 
pital. Roads and canals were commenced at the west and south-west, banks 
were created, and the capitalist was led to believe that he was to obtain ten 
or fifteen per cent, per annum for the use of the means that he thus placed 
under the control of strangers. The day of settlement, however, arrived. 
England claimed payment for the cloth and iron ; but the means by which 
she might have been paid were scattered to the four winds of heaven, 
' invested in unproductive roads, and in banks that were ruined by the failure 
of their debtors ; and thus were wasted as many millions as would have 
built furnaces to produce quadruple the iron we ever yet have used, and con- 
verted into cloth all of the cotton we then produced. The mass of smaller 
capitalists were ruined, but the few were made rich. 

We are now moving in the same direction. Money is said to be cheap ; 
that is, there is much in bank at the credit of depositors, for which they are 
receiving no interest. The papers of the day informs us that Western city 
stocks and bonds are coming into demand ; and here we have the beginning 
of a movement similar to that of 1836. In a little time it will be judged 
expedient to create banks at a distance, and then a little while and England 
will claim payment for the cloth and iron we are now buying on credit, and 
then will be re-enacted the scenes of 1842. 



* Herapath's Railway Journal, quoted in North British Review, August, 1849. 

j-The Parliamentary expenses of 1845, 'G, and "7, were upwards of £10,000,000, or 

$50,000,000.— Ibid. 



THE HARMONY OF INTERESTS. 



151 



If we desire to know who are the persons from whom is derived the 
power thus to derange the movements of the world, it is needed only to look 
at the prices of cotton and yarn between the periods of 1844 and 1848, as 
shown in a former chapter. The farmers and planters of the world first 
give away their products, then borrow a part of them in the forms of cloth 
and iron, and when ruined by the operation are denounced as bankrupts 
and swindlers. 

The well-understood interests of the capitalists of all nations are in perfect 
harmony with each other. Whatever tends to diminish production in one, 
tends to diminish the return to capital in all. The British system is " a war 
upon the labour and capital of the world ;" upon her own as well as that 
of other nations. Its effect is to keep the return to the capitalist at a very 
low point, and often to deprive him altogether of return, and all because it 
tends to compel the labourer to underwork the Hindoo and the Russian, and 
to sink him to their level. Therefore it is that labourers and capitalists of 
other nations are forced to resort to measures of protection. The immediate 
effect of the adoption of efficient and complete protection, as a national mea- 
sure, would be the transfer to this country of an immense body of capital 
in the form of machinery, followed by a gradual rise in the rate of profit abroad, 
which would tend to attain a level with our own. That capital, once here, 
could not be reclaimed. Like the men we import, it would stay, and the 
effect that would follow necessarily from its transfer would be an increased 
import of men — of all, the most valuable species of capital, though now, in 
Europe, the most despised. 

To attain perfect freedom of trade, we need to raise the labourers and 
capitalists of Europe to a level with our own. The colonial system tends 
to depress and destroy both. 

CHAPTER FIFTEENTH. 
HOW PROTECTION AFFECTS THE LABOURER. 

Whenever there is in market a surplus of any commodity, whether tha L 
surplus be the effect of natural or artificial causes, the price of the whole 
tends to fall to that at which the last portion can be sold — and whenever 
there is a deficiency, the price of the whole tends to rise to that point at 
which the last portion that is needed can be obtained. Labour is a com- 
modity, the owners of which seek to exchange with other persons, giving it 
in the form of sugar or cotton, and receiving it in the form of cloth and iron, 
and, being such, it is subject to the same laws as all other commodities. So 
long as there shall be a surplus of it anywhere, the price everywhere tends to 
fall to the lowest level. With the diminution of the surplus anywhere, the 
price everywhere will tend to rise to a level with the highest. 

Mere labour, unaided by machinery, can effect little. The man who has 
no axe cannot fell a tree, nor can he who has no spade dig the earth. The 
man who has no reaping-hook must pull up the grain, and he who has no 
horse or cart must transport his load upon his back. Such is the condition 
of the people of India, and such, nearly, is that of the people of Ireland. 
Labour is consequently unproductive, and its price is low. 

To render labour productive, men require machinery, which is of three 
kinds, to wit : First, Machinery of j^oduction, consisting of lands that are 
cleared, drained, and otherwise fitted for the work of cultivation. Second, 
Machinery of conversion, as saw-mills, which convert logs into planks and 
boards ; grist-mills, which convert wheat into flour ; cotton and woollen- 
mills, which convert wool into cloth ; and furnaces, which convert lime, fuel, 
and ore into iron. Third, Machinery of transportation, by aid of which the 



152 



THE HARMONY OF INTERESTS. 



man who raises food is enabled to place it where he can exchange it with ths 
one who makes cloth or iron. 

The two latter descriptions make no addition to the quantity of food or 
wool that is to be consumed. The wheat or cotton that goes into the mill 
comes out flour or cloth. The barrel of flour that goes into the ship comes 
out a barrel of flour, neither more nor less, and it will feed no more people 
when it comes out than when it went in. 

The bushel of wheat that is sown comes out of the earth six, eight, or ten 
bushels, and the bushel of potatoes comes out twenty or thirty bushels. 
They have been placed in the machine of production, while the others have 
been placed in the machines of conversion or transportation. 

The more labour that can be applied to the machine of production, the 
larger will be the supply of food and wool, and the larger will be the quan- 
tity of both that will be deemed the equivalent of a day's labour. 

The nearer the place of conversion can be brought to the place of pro- 
duction, the less will be the necessity for transportation, the more steady will 
be the demand for labour throughout the year, the larger will be the quantity 
that may be given to the work of production, the better will the labourer be 
fed and clothed, and the more rapid will be the accumulation of wealth in 
the form of machinery to be used in the further increase of production. 

Wealth tends to grow more rapidly than population, because better soils 
are brought into cultivation ; and it does grow more rapidly whenever people 
abandon swords and muskets and take to spades and ploughs. Every increase 
in the ratio of wealth to population is attended with an increase in the power 
of the labourer as compared with that of landed or other capital. We all see 
that when ships are more abundant than passengers, the price of passage is 
low — and that when, on the contrary, passengers are more abundant than ships, 
the price is high. When ploughs and horses are more plenty than plough- 
men, the latter fix the wages, but when ploughmen are more abundant than 
ploughs, the owners of the latter determine the distribution of the product of 
labour. When wealth increases rapidly, new soils are brought into cultiva- 
tion, and more ploughmen are wanted. The demand for ploughs produces a 
demand for more men to mine coal and smelt iron ore, and the iron-master 
becomes a competitor for the employment of the labourer, who obtains a 
larger proportion of the constantly increasing return to labour. He wants 
clothes in greater abundance, and the manufacturer becomes a competitor 
with the iron-master and the farmer for his services. His proportion is again 
increased, and he wants sugar, and tea, and coffee, and now the ship-master 
competes with the manufacturer, the iron-master and the farmer; and thus 
with the growth of population and wealth there is produced a constantly in- 
creasing demand for labour, and its increased productiveness, and the con- 
sequently increased facility of accumulating wealth are followed necessarily 
and certainly by an increase of the labourer's proportion. His wages rise, 
and the proportion of the capitalist falls, yet now the latter accumulates 
fortune more rapidly than ever, and thus his interest and that of the labourer 
are in perfect harmony with each other. If we desire evidence of this, it is 
shown in the constantly increasing amount of the rental of England, derived 
from the appropriation of a constantly decreasing proportion of the product 
of the land : and in the enormous amount of railroad tolls compared with 
those of the turnpike : yet the railroad transports the farmer's wheat to 
market, and brings back sugar and coffee, taking not one-fourth as large a 
proportion for doing the business as was claimed by the owner of the wagon 
and horses, and him of the turnpike. The labourer's product is increased, 
and the proportion that goes to the capitalist is decreased. The power of the 
first over the product of his labour has grown, while that of the latter has 
diminished. 



THE HARMONY OF INTERESTS. 



153 



Look where we may, throughout this country, we shall find that where • 
machinery of transportation is most needed, the quantity of labour that can be 
given to production is least, and the return to labour — or wages of the 
labourer in food, clothing, and other of the necessaries and comforts of life — 
is least : and that where transportation is least needed, the ^ quantity of 
labour that can be given to production is greatest, and wages are highest : or in 
other words, that the nearer the consumer and the producer can be brought 
together the larger is the return to labour. 

For forty years past the cultivation of cotton in India has been gradually 
receding from the lower lands towards the hills, producing a constantly in- 
creasing necessity for the means of transportation, and a constant diminution 
in the quantity of labour that could be applied to production. With each 
such step labour has been becoming more and more surplus, and the reward 
of labour has been steadily diminishing. 

During a large portion of this period, such has been the case with Southern 
labour. It has been gradually receding from the lower landsof South Carolina 
and G-eorgia, producing a constant increase in the necessity for transportation, 
while the commodities to be transported would command in return a con- 
stantly decreasing measure of cloth, iron, and other of the necessaries of life. 
This tendency has been in some degree arrested by the large consumption at 
home, and by the power of applying labour to the culture of sugar j but were 
we now to change our revenue system, establishing perfect freedom of trade, 
the home manufacture of cotton and the home production of sugar must 
cease, and cotton wool would then fall to three cents per pound, for the 
planter would then be reduced to that as the only thing he could cultivate for 
sale. Labour would become more and more surplus, with a constant diminu- 
tion of the power of the labourer to obtain either cloth or iron. 

So has it been, and so must it continue to be, with the sugar and coffee 
planters. Their products yield them a constantly diminishing quantity of 
either cloth or iron, with constantly increasing difficulty of obtaining clothing 
or machinery in exchange for labour. 

In New England, wages — i. e. the power to obtain food, clothing, and iron 
in exchange for labour — are high, but they tend to rise with every increase 
in the productiveness of Southern and Western labour, and so will they con- 
tinue to do as Southern and Western men become manufacturers, because 
the latter will then have more to offer in exchange for labour. With any 
diminution in the productiveness of labour South or West, the wages of New 
England must fall, because there will then be less to offer them in exchange. 

In England, the power to obtain food, clothing, or iron, for labour, is 
small, and it tends to diminish with every increase in the proportion of the 
population dependent upon transportation, and every diminution in the pro- 
portion that applies itself to production, because with each such step there is 
a necessity for greater exertion to underwork and supplant the Hindoo, 
whose annual wages even now are but six dollars, out of which he finds him- 
self in food and clothing. With every step downwards, labour is more and 
more becoming surplus, as is seen from the growing anxiety to expel popula- 
tion, at almost any present sacrifice. Why it is so we may now inquire. 

The great object of England is commerce. 

Commerce among men tends to produce equality of condition, moral and 
physical. Whether it shall tend to raise or to depress the standard of con- 
dition, must depend upon the character of those w.'th whom it is necessary 
that it should be maintained. The man who is compelled to associate with 
the idle, the dissolute, and the drunken, is likely to sink to the level of his 
companions. 

So is it with labour. The necessity for depending on commerce with men 

20 



154 



THE HARMONY OF INTERESTS 



among whom the standard is low, tends to sink the labourer to the level of 
the lowest. Place half a dozen men on an island, two of whom are indus- 
trious and raise food, leaving it to the others, less disposed to work, to provide 
meat, fish, clothing, and shelter, and the industrious will be compelled to ex- 
change with the idle. Clothing and shelter are as necessary as bread, and those 
who play will therefore profit by the labours of those who work. The latter, 
finding such to be the result, will cease to work with spirit, and by degrees 
all the members of the little community will become equally idle. Here lies 
the error of communism and socialism. They seek to compel union, and to 
force men to exchange with each other, the necessary effect of which is to 
sink the whole body to the level of those who are at the bottom. 

So, too, is it with nations. The industrious community that raises food 
and is dependent on the idle one that makes iron must give much of the one 
for little of the other. The peaceful community that raises cotton and is de- 
pendent on the warlike one that raises silk, must give much cotton for little 
silk. Dependence on others for articles of necessity thus makes a community 
of goods, and the sober and industrious must help to support the idle and the 
dissolute — nations as well as individuals. 

So long as this state of dependence exists, the condition of each is deter- 
mined by that of the other. If the idle become more idle, and the dissolute 
more dissolute, those who still continue to work must steadily give more 
labour for less labour, and their condition must deteriorate unless they adopt 
such measures as shall gradually diminish and finally terminate their de- 
pendence on such companions. 

The policy of England has tended to produce communism among nations. 
She has rendered herself dependent upon other communities for supplies of 
the articles of prime necessity, food and clothing, obtaining her rice from the 
wretched Hindoo, her corn from the Russian serf, and her wool from the 
Australian convict, neglecting her own rich soils that wait but the application 
of labour to become productive. 

The necessary consequence of this is a tendency downwards in the con- 
dition of her people, and as it is with those of England that those of this 
country are invited to compete, it may not be amiss to show what is the con- 
dition to which they are now reduced by competition with the low-priced 
labour of Russia and of India. 

The Spectator, a free-trade journal, informs us* that " the condition of the 
labouring classes engaged in agriculture, long an opprobrium to our advance 
inent in civilization, has not improved ; while wages exhibit a universal ten- 
dency to decline beneath the lowest level of recent times." 

The Morning Chronicle has recently given a series of letters from a cor- 
respondent specially deputed to inquire into the condition of the labouring 
classes in the agricultural counties, and by him we are informed that in 
Buckinghamshire and Oxfordshire the average wages of the year will not 
exceed 9/ =$2-16 per week, while in Berks and Wiltshire they will not 
exceed 7/6 — 11-79, and with this it is to be borne in mind that "when a 
poor wretch is prevented for a day, or even half a day, from working, his 
wages are stopped for the time." The wife sometimes works in the fields, and 
adds three shillings a week to the fund out of which these unfortunate people 
are to be subsisted, yet this gain is not without a drawback, as will be seen 
by those who may read the following account of the condition of the English 
agricultural labourer, in the middle of the nineteenth century, which, long as 
it is, will be found interesting : — 



♦November 12, 1849. 



THE HARMONY OF INTERESTS. 



155 



"When a married woman goes to the fields to work, she must leave her children at 
home. In many cases they are too young to be left by themselves, when they are 
generally left in charge of a young girl hired for the purpose. The sum paid to this 
vicarious mother, who is generally herself a mere child, is from 8d. to Is. per week, in 
addition to which she is fed and lodged in the house. This is nearly equivalent to an 
addition of two more members to the family. If, therefore, the mother works in the fields 
for weekly wages equal to the maintenance of three children for the week, it is, in the 
first place, in many cases, at the cost of having two additional mouths to feed. But this 
is far from being all the disadvantages attending out-door labour by the mother. One of 
the worst features attending the system is the cheerlessness with which it invests the 
poor man's house. On returning from work, instead of finding his house 'in order and a 
meal comfortably prepared for him, his wife accompanies him home, or perhaps arrives 
after him, when all has to be done in his presence which should have been done for his 
reception. The result is, that home is made distasteful to him, and he hies to the nearest 
ale-house, where he soon spends the balance of his wife's earnings for the week, and 
also those of his children, if any of them have been at work. A great deal is lost also 
through the unthrifty habits of his wife. Her expertness at out-door labour has been 
acquired at the expense of an adequate knowledge of her in-door duties. She is an in- 
different cook — a bad housewife in every respect. She is also in numerous instances 
lamentably deficient in knowledge of the most ordinary needle-work. All that she wants 
in these respects she might acquire, if she stayed more at home and was less in the fields. 
In addition to this, her children would have the benefit of being brought up under her 
own eye, instead of being, as they are, utterly neglected and left to themselves ; for the 
party left in charge of them — and it is not always that any one is so — is generally herself 
a child, having no control whatever over them. It is under these circumstances that the 
seeds of future vice are plentifully sown. On the whole, as regards the system of married 
women working in the fields, I cannot, when the children are young, but look on the 
balance as being on the side of disadvantage. In that case I think it would be decidedly 
better for the poor man, having reference only to his physical comforts, that his wife 
stayed at home. And this is the position of many a labouring man. In many cases 
when the family is large, some of the children are at work, adding their scanty wages of 
from Is. Qd. to 2s. a week to the common fund. But I have known numerous cases of 
families of seven children, of which the eldest was not eight years old. Besides, when 
these are fit to work and earn wages of their own, his children soon become independent 
of him. and set up Ibr themselves. This is in one way a relief to him, unless his family, 
while diminishing at one end, is increasing at the other. There can be no doubt but that 
a family is frequently aided by the earnings of the children, but in by far the greater 
number of cases the means of support are procured by the parents themselves. From 
what has been already said of the disadvantage to the whole family at which the wife 
bears her share in procuring them, it will be evident that the husband's earnings are, 
after all, the true test and standard of his own condition and that of those dependent upon 
him. 

Moreover, in a very large proportion of cases, the wife remains at home, attending to 
duties more appropriate to her sex and position, in which case there is no other aid to be 
had, unless it be the trifling and fitful earnings of one or two of the children. We have 
seen that, in the counties in question, there are about 40,000 married couples, who, with 
their children, numbering about 120,000, depend exclusively upon agricultural labour for 
support. Of the 40,000 mothers, fully one-half stay at home, some being compelled to do 
so on account of the extreme youth of their children; and others, save when their fami- 
lies are somewhat advanced, preferring from calculation to do so, as being the best mode 
of turning their scanty means to good account. This may be taken as the case with half 
the married couples, who, with their families, will number about 100,000 individuals. 
So far, therefore, as these are concerned, the children, in about the same proportion of 
families, being too young to add any thing to the common stock, there is nothing else to 
adopt as the test of their condition and the standard of their comforts but the earnings of 
the husband. Let us inquire, therefore, into the condition of a family thus solely de- 
pendent upon such wages as the husband has, on the average, received during the past 
portion of the current year. I can best illustrate that condition by one of the uumerous 
cases which came under my consideration in Wiltshire. The labourer in that case had 
had 8s. a week, but he was then only in receipt of 7s. He had seven children, the eldes 
of whom, a girl, was in her eighth year. Two of his children had been at a « dunce's 
school ;" but they were not then attending it, simply because he could not afford the Ad. 
a week which had to be paid for their education. To ascertain how far he was really 



156 



THE HARMONY OF INTERESTS. 



incapable in this respect, I requested him to detail to me the economy of his household for 
a week, taking his earnings at 8s. The following is the substance of the conversation, 
discarding, for the reader's sake, the portions in which the names are given. 

When are your wages paid ? — On Saturday night, but often only once a fortnight. 

What do you do with the money on receiving it ? — I first lay by my rent, which is a 
shilling a week. I then go to the grocer's and lay in something for Sunday and the rest 
of the week. I buy a little tea, of which I get two ounces for 6rf. Sugar is cheap, but I 
cannot afford it. We sometimes sweeten the tea with a little treacle, but generally drink 
it unsweetened. 

Do you purchase any butcher meat? — Generally for a Sunday we buy a bit of bacon. 

How much?* — It is seldom that I can afford more than half a pound. 

Half a pound among nine of you ? — Yes ; it is but a mere taste, but we have not even 
that the rest of the week. It costs me about 5i. 

Do you buy your bread, or make it at home ? — We buy it. We have not fire enough to 
make it at home, or it would be a great saving to us. 

Do you buy a quantity at once, or a loaf when you need it? — We buy it as we need it. 

Have you a garden attached to your cottage ? — I have about fifteen poles, for which I 
pay l%d. a pole. It is less than the eighth of an acre. 

What do you raise from it ? — We raise some potatoes and cabbages. 

Do you raise a sufficient quantity of potatoes to serve you for the year ? — No, not even 
if they were all sound. 

In addition to the potatoes and the cabbages which you raise, how much bread do you 
require for your own support, and that of your wife and seven children for the week? — 
We require seven gallons of bread at least. 

What is a gallon of bread ? — It is a loaf which used to weigh 8 lbs. 1 1 oz., but which now 
seldom weighs above 8 lbs. Those who supply bread to the union seldom make it over 8 lbs. 

What is the price of the gallon loaf? — Tenpence. It is cheaper than it was, but then 
there is not always so much of it. It is often of short weight. 

Seven gallons of bread at lOd. a gallon would make 5s. lOd., would it not? — I believe 
it would make about that — you ought to know. 

Do you always get seven gallons a week? — No, seldom more than six. 

Then you spend 5s. in bread, and make up for the want of more by potatoes and cab- 
bages ? — Yes. 

You have still some money left ; what do you do with it ? — It costs us something for wash- 
ing. For soap and soda, and for needles and thread for mending, we pay about 5c?. a week. 

Do you buy fuel ?— -We get a cwt. of coal sometimes, which would cost us about Is. or 
Is. l$d. if we took in any quantity and paid ready money. When we do neither it costs 
us about Is. 4d. a cwt. If there is one poor man who can afford to buy it in any quan- 
tity for ready money, there are forty who cannot. 

How long would a cwt. of coals serve you ? — We make it last one way or another for 
two weeks. 

Your fuel, therefore, will cost you about 8c?. a week ? — It will. 

Is there any thing else you have? — We buy a little salt butter sometimes, which we can 
get from 6£d to lOd. a pound. We are obliged, of course, to take the cheapest; "and 
really, sir, it is sometimes not hardly fit to grease a wagon with." 

But your money is already all gone : how do you pay for your butter ? — It is not always 
that we have it, and we can only have it by stinting ourselves in other things. 

You have said nothing about your clothing : how do you procure that ? — But for the 
high wages we get during the harvest time, we could not get it at all. 

How long does the time last when you get high wages ? — About ten weeks, and but 
for what we then get I do not know how we could get on at all. 

From this recapitulation it must certainly appear a mystery to the reader how they get 
on as it is. The weekly expenditure, in our view, is as follows, the family being nine 



»nd the weekly receipts 8s. : — 

s. d. 

Rent .10 

Tea . . . ... . . 06 

Bacon ........ 5 

Bread 5 

Soda, soap, &c 5 



Fuel 8 



Total 8 



THE HARMONY OF INTERESTS. 



157 



The provision for clothing is in the extra wages paid at harvest time, while the family 
cannot be treated to the luxury of bad butter without sacrificing the tea, two ounces of 
which must serve for a week, the half pound of bacon, which affords but a "mere taste" 
on Sunday to each ; some of the bread which is already but too scantily supplied; or a 
portion of their fuel, the absence of which renders their home still more cheerless and 
desolate. Sugar, too, is out of the question, without trenching upon items more absolutely 
necessary. Nor is there any reserved fund for medicines, too often required by a family 
of nine thus miserably circumstanced. "What, in short, have we here ? We have nine 
people subsisting for seven days upon 60 lbs. of bread — scarcely a pound a day for each, 
half a pound of bacon, and two ounces of tea, the rest being made up by a provision, too 
scanty in nine cases out of ten, of potatoes and cabbages raised in the garden. Could 
they descend much lower in the scale of wretchedness, especially when we couple with 
their stinted supply of the less nutritious kinds of food the miserable hovels in which it 
is taken by them, either shivering in the winters frosts, or inhaling the pestilential odours 
engendered around them by the summer heats'? 

I could no longer express any surprise at 4d. a week being grudged for the education 
of two children. 

This being the mode in which his weekly wages were expended, I asked the same 
individual to give me an account of his daily life, including his labour and fare. In reply 
to my questions on this point he answered, in substance, as follows : — 

At what hour do you go to work? — At six in the morning, generally, in summer; but I 
have gone much earlier. In winter time work begins at a later hour. 

Do you breakfast at home? — When I do not go out very early I generally do. 

Of what does your breakfast consist? — Principally of bread, and sometimes a little tea. 
Sometimes, too, we have a few potatoes boiled. 

When do you dine? — About twelve. 

Of what does your dinner consist? — On the Monday my wife gets a little flour and 
makes a pudding, which, with a few potatoes, forms my dinner. Sometimes we have a 
pudding on other days, but generally our dinner is bread and potatoes, with now and 
then a little cabbage. When the family is not large, there may be a bit of bacon left that 
has not been used on Sunday, but that is never the case with us. 

You return to work again? — I do, and when 1 come home at night may have a little 
tea again, with the bread which forms my supper. The tea is never st ong with us, but 
at night it is very weak. 

Do your children get tea ? — We have not enough for that. 

What is their drink ? — Water; sometimes we get them a little milk. 

What is your own drink? — Water. 

Do you never drink beer? — Never, but when it is given me; I can't afford to buy it. 

When your dinner consists of bread, potatoes, and water, have you nothing to season it 
or make it palatable ? — Nothing but a little salt butter ; and we can only afford that when 
the bread or potatoes happen not to be very good, or when we are ailing, and our 
stomachs are a little dainty. 

When your bread or potatoes are bad, or your stomachs are dainty, you take as a 
relish the butter which you said was scarcely fit to grease a wagon with? — We have 
nothing better to take. 

Suppose you had nothing but bread to eat, how much would you require to sustain you 
at work in the course of a day ? — Two pounds at least. 

And how much would one of your children require ? — About the same. A child, 
although not at work, will eat as much as a man ; children are always growing, and 
always ready to eat, and one does not like to refuse food to them when they want it. I 
would sooner go without myself than stint my children, if I could help it. 

Then, at the rate of two pounds a day for each, you would require for all about 126 lbs. 
for the week ? — I suppose about that. 

And, as you only get about sixty pounds of bread a week, you have to rely on your 
potatoes and cabbages, your half pound of bacon, and two ounces of tea, to make up for 
the sixty-six pounds which you cannot get? — We have nothing else to rely on. 

Have you enough of these to afford you as much nourishment as there would be in 
sixty-six pounds of bread ? — Not nearly enough. 

Is what you have stated your manner of living from week to week? — It is when 1 
have work. 

And when you have not work, how is it with you? — In the winter months we have 
sometimes scarcely a bit to put in our mouths. 



158 



THE HARMONY OF INTERESTS. 



Such is the substance of the statement, as regards his own and his family's circum- 
stances, made to me by a labouring man in the receipt of the average rate of wages for 
the last nine months in Wiltshire. Comment is scarcely needed, the facts speaking but 
too plainly for themselves. Had the family been smaller, or the wages a little higher, 
instead of a " taste/' they might have had a meal of bacon once a week. But even then 
it would be but once a week, potatoes and bread still constituting the staple of their diet, 
and even these not being had by them in sufficient quantity. Besides, even if they had 
it more frequently, bacon is not the most nourishing food in the shape of butcher meat ; 
it is fat, and goes to fat. The little lean that is in it is almost destroyed by the process of 
curing. But it is greasy, and soon satisfies. " It fills us sooner than any other kind of 
meat," was the reply given to me when I asked why they preferred it to beef? But the 
fault is that it does not fill them ; it satiates, without filling them. Bulk is required as 
well as nutriment in food. The stomach has a mechanical as well as a chemical action 
to perform. A man could not live on cheese, nor could he exist on pills having in them 
the concentrated essence of beef. They buy bacon because it goes a longer way than 
other meat — in truth, they buy it because it soon cloys them. Nor is it always that they 
have even a " taste" of it once a week. I have seen several families who had not tasted 
butcher meat of any kind for weeks at a time. When French and English workmen 
came together during the construction of some of the French railways, it was found that 
the Englishman could perform far more work than his French competitor. This was 
universally attributed to the superiority of his diet, it being supposed but reasonable on 
all hands to expect more work from the man who fed on beef and porter than from him 
whose fare was bread and grapes. But the fare of the man who is expected by his 
labour to develope, year after year, the agricultural wealth of England, is, in a large pro- 
portion of cases, little better than bread and water — the fare of the condemned cell ! 
Contrast the condition of the English farm labourer with that of the farm labourer in 
Canada. In England he eats butcher-meat once a week, and not always that; in Canada 
he has as much of it as he wants once, at least, and frequently twice a day. Contrast his 
conditior even with that of the slave in the Southern States of America. In Virginia, the 
great slave State, it is seldom that a day passes without the slave eating butcher-meat of 
some kind or other. In addition to this, when he is old and infirm, he has a claim on his 
master for support. But the English labourer, if he has a family to sustain, has not, even 
during the days of his strength, when he can do, and does work, the same nutritious diet 
as the slave ; while, when he is disabled, or loses his work, he must starve, or, as the 
alternative, become a vagrant, or the recipient of a formal and organized charity. In the 
words of one of themselves, " it is not a living, sir — it is a mere being we get;" by which 
he intended to convey that their reward for their toil was their being barely enabled to 
exist. 

It may be said that the case put is an extreme one. It is the case, however, of nearly 
one-half of those who are dependent upon labour in the fields. But it may be said that I 
have omitted to take into account some little privileges which the labourer has, and 
which, when he avails himself of them, tend to enhance his comforts. He may keep a 
pig, for instance, and his employer will sometimes find him straw for it, which, in pro- 
cess of time, will serve as manure for his little garden. This looks very well on paper, 
but that is chiefly all. In the four counties under consideration the number of labourers 
keeping pigs is about one in twelve. It is also a striking illustration of the condition of 
the labourers, that even such of them as do feed a pig seldom participate in the eating of 
it. Then we hear a great deal about the coal and clothing clubs, to which I shall here- 
after more particularly advert, and the chief merit of which is that they tend to render 
life not pleasant, but barely toierable to the poor." 

The sleeping accommodations are thus described : — 

" These are above, and are gained by means of a few greasy and rickety steps, which 
lead through a species of hatchway in the ceiling. Yes, there is but one room, and yet 
we counted nine in the family ! And such a room ! The small window in the roof 
admits just light enough to enable you to discern its character and dimensions. The 
rafters, which are all exposed, spring from the very floor, so that it is only in the very 
centre of the apartment that you have any chance of standing erect. The thatch oozes 
through the wood-work which supports it, the whole being begrimed with smoke and 
dust, and replete with vermin. There are no cobwebs, for the spider only spreads his 
net where flies are likely to be caught. You look in vain for a bedstead; there is nons 
in the room. But there are their beds, lying side by side on the floor, almost in contact 



THE HARMONY OF INTERESTS. 



159 



with each other, and occupying nearly the whole length of the apartment. The beds are 
large sacks, filled with the chaff of oats, which the labourer sometimes gets and at others 
purchases from his employer. The chaff of wheat and barley is used on the farm for 
other purposes. The bed next the hatchway is that of the father and mother, with whom 
sleeps the infant, born but a few months ago in this very room. In the other beds sleep 
the children, the boys and girls together. The eldest girl is in her twelfth year, the eldest 
boy having nearly completed his eleventh ; and they are likely to remain for years yet in 
the circumstances in which we now find them. With the exception of the younge~t 
children, the family retire to rest about the same hour, generally undressing below, and 
then ascending and crawling over each other to their respective resting-places for the 
night. There are two blankets on the bed occupied by the parents, the others being 
covered with a very heterogeneous assemblage of materials. It not unfrequently happens 
that the clothes worn by the parents in the day time form the chief part of the covering 
of the children by night. Such is the dormitory in which, lying side by side, the nine 
whom we have just left below at their wretched meal will pass the night. The sole 
ventilation is through the small aperture occupied by what is termed, by courtesy, a win- 
dow. In other words, there is scarcely any ventilation at all. What a den in the hour 
of sickness or death ! What a den, indeed, at any time! And yet when the sable god- 
dess stretches forth her leaden sceptre over the soft downy couch in Mayfair, such are 
the circumstances in which, in our rural parishes, she leaves a portion of her slumbering 
domain. 

Let it not be said that this pioture is overdrawn, or that it is a concentration, for effect, 
into one point, of effects spread in reality over a large surface. As a type of the extreme 
of domiciliary wretchedness in the rural districts, it is underdrawn. The cottage in 
question has two rooms. Some have only one, with as great a number of inmates to 
occupy it. Some of them, again, have three or four rooms, with a family occupying each 
room; the families so circumstanced amounting each, in some cases, to nine or ten indi- 
viduals. In some cottages, too, a lodger is accommodated, who occupies the same apart- 
ment as the family. Such, fortunately, is not the condition of all the labourers in the 
agricultural districts; but it is the condition of a very great number of Englishmen — nof 
in the backwoods of a remote settlement, but in the heart of Anglo-Saxon civilization, in 
the year of grace 1849." 

Bad, however, as is all this, it is likely to be worse. Everywhere, notices 
are being given of a reduction of wages, and diminution in the number of 
persons to be employed. There is scarcely, says the writer, a district in any 
of these counties " where the work of reducing wages has not already com- 
menced." In one of them, as early as last June, there was a reduction from 
8s. to 7s., and " apprehensions are everywhere entertained that they will be 
reduced to Qs. =$1-44. " " Is it any wonder," he adds, " that, with such a 
prospect before them, the agricultural labourers should brood over their cir- 
cumstances with the ominous sullenness of despair ? What is that prospect ? 
The winter is approaching — the season when most is required by us all to 
administer to our comforts. They are entering upon that season with here 
8s., there 6s., and there again but 5s. a week for the support of their families. 
How far will these pitiful portions go in households of five, six, seven, eight, 
nine, or ten individuals? We cannot, in estimating a labourer's comforts at 
any given time, apply to them the test of his average wages. It is his wages 
for the time being that decide the measure of his condition. Had he at any 
time more than was necessary to carry him and his family up to the line of 
comfort, he might lay by the surplus for adverse times. But he never has 
what secures him perfect comfort, and is always more than tempted to spend 
all he gets. He therefore commences this winter, as he does every winter, 
without any reserve-fund to fall back upon ; and the fact is appalling that, 
in this month of October, thousands of families in the very heart of England 
have no better prospect before them than that of living on 8s., 6s., and even 
5s. a week, in their cold, damp, cheerless, and unhealthy homes." 
• The Canadian farmer is invited to contend in the market of England with 
the serf of Russia for the privilege of supplying with food men to whom a 



160 



THE HARMONY OF INTERESTS. 



morsel of bacon on a Sunday is a luxury, when by the simple process of 
annexation and protection he could bring to his side the same men and con- 
vert them into large and valuable customers. The planter is invited to con- 
tend in the market of England for the privilege of clothing men who want 
means to buy bread, when by an exercise of his will he could bring to his 
side, annually, millions of the same men, each of whom would then require 
twenty pounds a year, two millions consuming half as much as was consumed 
in 1847 by almost thirty millions of the people of England and Wales. 

The system of England demands that with such people as these we shall 
establish a community of goods. Were it allowed free play — were the people 
of the world to establish what is called free trade, and thus unite their efforts 
for the maintenance of the monopoly system, wages universally would fall to 
the level of those of the poorest countries of the world, for with every step 
those of England would, of necessity, fall, because they must be kept at that 
point which would enable her people to underwork the world, and the tendency 
everywhere would be, as it has been in Ireland and India, downward. 
The adoption of perfect free trade by this country would, for a short time, 
produce some activity there, but a very short period would prove that we 
bought far less under free trade than we had done with protection, and in the 
mean time the disproportion of the English population would have largely 
increased, and the difficulty would be then far greater than it is now, great 
even as it is. We now pay for far less merchandise than we did three years 
since, and were it not that we are still able to buy on credit, we should make 
smaller demands on England than we have done at any period since 1842. 
The greater the amount of capital thus lent to us, the lower must fall the 
condition of the English labourer. Every step now being made by England 
is a step downwards, and if we would not have our labourers reduced to a 
level with hers we must, by protection, endeavour to raise hers to a level 
with ours, as it will do by relieving us from the necessity for dependence upon 
commerce with a people whose labour is lower in the scale than our own. It 
tends to raise the value of man abroad and at home, and to enable all to ob- 
tain more food, fuel, and clothing with less labour. Under it immigration 
has always increased, and it has declined with its diminution. That it must 
tend to raise wages abroad is obvious from the fact that so many hundreds 
of thousands of the population of Europe, held to be surplus, have sought our 
shores, thus diminishing the quantity of labour seeking there to be employed. 

With the approach to what is called freedom of trade, that system which 
tends to the maintenance of the monopoly of machinery in England, the 
value of labour here is falling towards the level of that of England. The 
present diminished production of coal and iron is maintained only by aid of 
a great diminution of wages. Labour is becoming surplus, and immigration is 
already falling off. This year will show a large diminution therein, and 
every step in that direction must be attended with a rise of freights tending 
to diminish the power to export either food or cotton. With the diminution 
of wages at the North, there is already a diminished power to consume either 
food or clothing, with increase in the surplus that is to be sent. Thus the same 
measures that increase the necessity for depending on machinery of trans- 
portation diminish the power to obtain it, to the deterioration of the condition 
of the whole body of the people, labourers and capitalists, farmers and 
planters, manufacturers and ship-owners ; and the same which tend to di- 
minish our necessities for depending thereon, tend to increase our power to 
obtain it, to diminish the burden now pressing upon the land-owners and 
labourers of Europe, and to bring about that state of things which shall give 
to us and them perfect freedom of trade. The harmony of all interests, 
whether individual or national, becomes more and more obvious the more the 
subject is examined. 



THE HARMONY OF INTERESTS. 



161 



It may not be uninstructive to review the last few years, with special 
reference to the discords that have occasionally been seen to exist between 
the employers and the employed, accompanied by strikes, combinations, &c, 
with a view to show their cause. 

It is within the recollection of most of my readers that the years from 1836 
to 1839 were distinguished for disturbances of this kind. The cause is ob- 
vious. Production was diminishing, and the labourer found himself unable 
to obtain the quantity of food, fuel, and clothing to which he had been accus- 
tomed. He desired a rise of money-wages to meet the rise in the price of 
food, but the employer could not give it, and hence arose combinations for 
the purpose of compelling him to do so. 

From 1844 to 1848, harmony was restored, because production increased, 
and the labourer found that each year enabled him to obtain more food and 
clothing, and better shelter, with the same labour. 

The last year has been marked by a succession of combinations. In the coal 
region of Pennsylvania, at Pittsburgh, Lowell, and various other places, there 
have been strikes and turn-outs, some of them long-continued ; and every- 
where there have been clamours for the passage of laws restricting the hours 
of labour ; but those who thus clamoured desired that wages should remain 
as they were. These things all result from the one great fact that the pro- 
ductiveness of labour is diminishing, and that wages are tending towards the 
European level. 

To that cause was due the jealousy of foreigners which gave rise to the 
"native" party. In 1842, employment was almost unattainable, and the 
native workmen were indisposed to divide with strangers the little that was 
to be had. With the increased productiveness of labour wages rose, and the 
" native" party almost died out, while the import of foreigners was quad- 
rupled. If the system of 1846 be continued, the same jealousy will re-appear, 
and foreigners will be proscribed, while immigration will be diminished. 

It is to the interest of the native workmen that the wages of Europe should 
be brought up to a level with our own, and the only way in which that can 
be accomplished is for us to pursue a course that shall tend to render it the 
interest of every man in Europe that can find means to pay his passage to 
endeavour to reach our shores. Every one that comes will be a producer of 
something, and every one therefore a customer to others for their products. 
Look where we may, there is the most perfect harmony of interest. 

CHAPTER SIXTEENTH. 
HOW PROTECTION AFFECTS THE SLAVE AND HIS MASTER. 

Protection tends to increase the productiveness of labour. Many of the 
labourers of the Union are held as slaves, and protection must tend to render 
their labour more valuable to their owners, who may, therefore, be rendered 
less disposed to part with them. If such were likely to be the fact, protec- 
tion would tend to perpetuate slavery, and all who were opposed to its continu- 
ance should advocate free trade. 

By all English writers, and by many among ourselves, it is held that the 
way to terminate the existence of slavery is to destroy the value cf slave- 
labour. With that view the British government is urged to prohibit slave- 
grown sugar, and to encourage the extension of the cotton culture in India — 
the wretched Hindoo, who labours a whole month for two rupees, (one dol- 
lar,) out of which he feeds and clothes himself, being held to be a freer man 
than the well-fed, well-clothel, and well-lodged labourer of Virginia or Ken- 
tucky. 

Throughout the world, men have become free as wealth and population 

21 



162 



THE HARMONY OF INTERESTS. 



have grown, and as land has increased in value. In the early days of Rome, 
when Latium was filled with prosperous cities, land was valuable, and men 
were free. "With the gradual depopulation of Italy, land lost its value, and 
large masses accumulated in the hands of great proprietors surrounded by 
slaves. So was it in Attica. In the days of Solon, land was valuable and 
men were free. In those of Herodes Atticus, land was valueless and men 
were slaves. The richest lands of India have been abandoned and are now 
jungle, and the descendants of the little village proprietors of the last cen- 
tury now sell themselves to slavery in Jamaica and Denierara. In Russia, 
land has no value. The value of a property is estimated by the number of 
its serfs. In Belgium, land has great value, and the people are the freest in 
Europe. With the gradual increase in the value of land in England, men 
became more free, whereas with every step tending to increase dependence 
on Poland and Russia for food, land is becoming less valuable, labourers are 
becoming more and more the inhabitants of parish work-houses and the 
slaves of parish beadles, and landowners are becoming more and more anxious 
to expel the population that would otherwise give value to the land. The 
land of Ireland has almost lost its value, and the labourer of Ireland has 
become a slave to the caprices of masters who regard him as an encumbrance 
to be gotten rid of by any process, however cruel. 

Increase in the value of land tends towards freedom ; decrease tends to- 
wards slavery. If protection tends to add value to land, it tends to the pro- 
motion of freedom ; if it tends to diminish its value, it tends to the mainte- 
nance of slavery. 

The least valuable land is that in which men are most rare ; the most valua- 
ble is that in which they most abound. The cause of the difference between 
the two is to be found in the difference in the labour required for the per- 
formance of exchanges. The hills of Limburg, the poorest part of Belgium, 
rent for from six to eight dollars; and for flax land in Flanders, ten to 
twelve dollars per acre is a common rent ; while cotton-producing land of 
the highest quality may here be had, in fee, for one-eighth of the latter sum. 
The one has a market on the land, and the other has not ; and in this single 
and simple fact may be found nearly the whole reason for this enormous 
disproportion. 

The man who lives in Arkansas has to employ numerous men, horses, 
steamboats, ships, and warehouses, in the performance of every exchange, 
and the consequence is, that he receives for the produce of his land little 
more than compensation for his labour, and his land has scarcely any value. 
He can raise for market little else than cotton, of which the earth yields but 
little, for which reason it commands a price that will enable it to bear trans- 
portation. His surplus corn is almost valueless; while to attempt to raise for 
market potatoes or turnips, of which the earth yields by hundreds of bushels 
to the acre, would be ruinous. 

The man who lives near New York exchanges directly with the consumer 
of his products and the producers of the 3ommodities that he desires to con- 
sume. He can raise potatoes, turnips, and cabbages, bulky articles; or 
strawberries and raspberries, delicate ones — none of which will bear trans- 
portation. He sells his milk, and is not compelled to convert it into butter 
or cheese. He is not required to convert his corn into pork, with a view to 
diminishing its bulk and enabling it to go to market. His products are all 
consumed near him, and he can readily return to the land the refuse, increas- 
ing its productive power from year to year. The amount yielded is far 
more than wages for his labour, and the whole surplus is the rent he de- 
rives from his land, fifteen or twenty years purchase of which is its market 
value. 



THE HARMONY OF INTERESTS. 



163 



That value is three, four, five, or six hundred dollars per acre, while land 
in Arkansas is now offered in free gift to those who will come and pay the 
taxes. The sole cause of the difference is, that the owner of the one ex- 
changes directly with the men who make hats and coats, shoes and stock- 
ings, ploughs and harrows, and the other does not. To make the land of 
Arkansas as valuable as that near New York, it would be necessary that its 
owner should exchange for hats and shoes, ploughs and harrows, as freely as 
does the man of New York j that is, he must make a market on the land for 
the products of the land. The return to labour would then be large, and 
the value of man would rise ; but all that was returned over and above the 
wages of the labourer would be rent, and the value of land would rise. 
Men would then become free j first, because the cost of raising a slave would 
be far more than he was worth when raised ; and, second, because the land 
would be too valuable to be cultivated by slaves. 

The man of Wisconsin can afford to raise hogs, because corn is but twenty 
cents a bushel. The man near New York cannot, because corn is worth 
sixty cents. The man of Arkansas can afford to raise slaves, because they 
are worth as much as they cost to raise. The man near New York could not, 
because they would cost him mora than their services would repay. Had 
Arkansas a market on the land for all the products of the land, hired labour 
would be found so much cheaper that no man would desire to raise a slave. 

The man who owns valuable machinery cannot afford to employ poor 
labour. The interest on his factory is as great if the looms produce but 
twenty-five yards per day as if they produced fifty. With the former quan- 
tity he would be ruined. With the latter he would grow rich. The slave 
will give him the one — the freeman the other. To make the slave work like 
the freeman, he must have an inducement — that is, he must receive wages. 

Were a large landholder near New York offered the services of men, their 
wives and families, on the same terms as the planter has those of his slaves — to 
feed, clothe and lodge them — he could not profitably accept them ; and yet 
the money-price of such labour is at least twice as great as at the South. 
The price of their food, however, would be thrice as great, and they would 
require more clothing, and their children must be educated ; and to obtain 
•11 these things there would be needed the exertion of the man working for 
himself, and the economy of one whodooked to the future for himself and his 
family. Were such an offer accepted, the party accepting would speedily 
find that his people produced less and wasted more than those of his neigh- 
bours, and that the rent of his land was diminished by the arrangement. 

Place in the Southern States machinery for converting into cloth half a 
million of bales of cotton, and for producing half a million of tons of bar- 
iron, and there would be created a great demand for labour. The facility of 
obtaining iron in exchange for corn and cotton would cause the making of 
thousands of miles of railroad, and here would be a new demand for labour. 
The mills, the furnaces, and the roads would bring towns, filled with tailors, 
shoemakers, hatters, blacksmiths, makers of ploughs and harrows, looms, 
spindles, and steam-engines, and here would be a new and large demand for 
labour, while the number of labourers would not be increased. It would 
then become necessary to economize labour because of its increased value. 
How could it be done ? The slave would do no more than his accustomed 
work, without an inducement, and that is to be found in wages. The in- 
creased product of his labour would thenceforth go to himself. 

Large crops would then be obtained in lieu of small ones, and one hun- 
dred bushels of corn, or one hundred pounds of cotton would then buy 
more cloth or iron than now are obtained for three. The increased value of 
crops would raise the price of land, and if that should average but ten 



364 



THE HARMONY OF INTERESTS. 



dollars per acre over the South, it would amount to four thousand millions 
of dollars, and thus would the planters be made rich. 

Here, then, are two commodities, man and land, both increasing in value, 
but the increase in the one goes to the man himself, while that of the other 
goes to the owner. What would be the effect of this on their market value ? 
Where property is steadily growing in value, it sells for twenty, thirty, and 
even more years' purchase of its rent. Such would be the case with land. 

When property is decreasing in value, it sells for six, eight, or ten years' 
purchase of the rent that can be commanded for its use. Such would be the 
case with the slave. With the increased productiveness of his labour he 
would be obtaining for himself an increased proportion, leaving a diminished 
one to his owner, and thus would the value of the slave be transferred to 
the land. 

To raise a slave would then become too costly. What then would become 
of the children ? The parents, everywhere, make sacrifices for their offspring, 
and by them alone can children be raised, where land is valuable. To in- 
duce those sacrifices they must know that they are working for their own 
children, and not for their master's slaves. 

With increase in the value comes the division of land. Great plantations 
would become small ones, each of which would yield more than is now 
yielded by the whole. Small farms would come, cultivated by negro tenants, 
and thus step by step would men, their wives and children, become free, 
as their late owners were becoming rich. 

To accomplish both these objects it is necessary that the people of the 
South should have mills and furnaces to make a market on the land for the 
products of the land. Those they cannot have without protection against the 
monopoly system by which they are now being exhausted. The abolitionist 
and the slaveholder should then unite in the demand for the adoption of 
measures tending to the abolition of the English monopoly of machinery. 

The former would, however, say that the process would be too slow. On 
the contrary, it would be most rapid. Had the tariff of 1828 continued in 
existence to the present time, the lands of the South would now be trebled 
in value, and the slaves of the South would now be far advanced towards 
freedom. 

The latter would say that they would lose their property. The answer 
would be that for every dollar of diminished value in man, they would have 
five, or ten, or twenty in the increased value of land. It would be precisely 
as land became valuable that man would become free. 

The Union is now agitated by the question whether or not slavery shall 
be carried beyond its present limits. The agitators are determined to force 
the Wilmot proviso upon the South, and the people of the latter declare that 
they will dissolve the Union rather than submit to it. Neither is disposed 
to penetrate below the surface to understand the cause of difficulty. 

If a demand for labour existed in the Slave States, consequent upon making 
a market on the land for its products, the necessity for emigration would 
pass away, and immigration would begin. The people of the South would 
not then desire to go to California, nor would those of the North deem it 
necessary to pass laws to prevent them from so doing. All the discord be- 
tween the different portions of the Union results from the existence of the 
colonial system, which it is the object of protection to terminate, and thereby 
raise the value of land and of mm, black or white, throughout the world. 

This question has thus far been looked at as one of dollars and cents merely, 
and such is the light in which it should be examined. When it can be 
shown to be the interest of a body of men to pursue a certain course, we may 
safely calculate upon its being pursued by a large portion of them ; but 



THE HAKMONT OF INTERESTS. 



165 



when we confine ourselves to showing that it is their duty, and that in the 
performance of that duty they must neglect their interests, we may as safely 
calculate that very few will follow in the course thus indicated. The agitators 
of the North would impair the value of property and destroy the peace of the 
South, while deteriorating the condition of the objects of their sympathy, and 
all this they would do that others might be compelled to perform their duties. 
It is time that the reasonable men, North and South, should understand 
each other, and determine to adopt the course that would give value to labour 
and land, and thus relieve themselves from the dangers incident to the agi- 
tation of men who would destroy the value of both. 

"With every step of improvement in the value of land, there would come 
improvement in the physical and moral condition of its owner. Throughout 
the South, there is even now a growing indisposition to hold men in slavery ; 
but how rapidly and widely would that feeling extend itself were the owners 
of land and of slaves to feel themselves growing richer instead of poorer, as 
is now the case. The cause of emancipation has been going backwards for 
the last twenty years, and those who desire to know why it is so have only 
to look to the fact, that, in 1845-6, 600,000,000 of pounds of cotton would 
not bring as much iron to the plantation as 100,000,000 would have done 
thirty years before, or 275,000,000 only a dozen years before.* The conse- 
quence has been a growing tendency to the abandonment of land, and an 
increased regard for that species of property which was capable of being 
transferred, which land was not. Harassed and annoyed by abolitionists on 
the one hand, and on the other by a constant deterioration in the value of the 
only crop upon which he has been accustomed to depend, and compelled to 
change from that to sugar or to wheat, it is no matter of surprise that there 
should have been produced the state of feverish excitement now witnessed 
everywhere in the planting States, and which must increase unless the loom 
can be brought to take its place by the side of the cotton. 

It is a common impression, that the people of South Carolina have ex- 
hausted their rich lands, and that they are moving away from poor ones, yet 
nothing can be more erroneous. They commenced upon poor soils, as has 
been done in every country of the world, and they are now flying from 
meadow-lands capable of yielding the finest artificial grasses, of which they 
have millions of acres untouched; from river bottoms uncleared, from 
swamps undrained, and from marl, and lime, and iron ore, all of which exist 
in almost unlimited quantity. Nature has done for that State every thing 
that could be done ; but man has, as yet, done nothing but exhaust the poor 
soils upon which the work of cultivation was first commenced, and therefore 
it is that their agricultural reports, and their newspapers repeat, year after 
year, the question, " What shall the cotton planters do V 

" This," says the editor of the South Carolinian, " is a question daily asked by our 
planting friends. There seems,-' he continues, K at present great solicitude as to the policy 
which is to be pursued by them in pitching their next crop. We hear the cry of less 
cotton and more grain ringing from one end of the State to the other. We are not sur- 
prised that many planters who plant heavily should say their present crop will bring 
them in debt if the ruinoas prices continue much longer. No planter can make both 
ends meet who receives only four or five cents for his cotton, and has to pay the present 
exorbitant prices for bagging, bale rope, pork, mules, sugar, coffee, salt, and iron. Mules 
are high, pork is high, bagging and rope are up to the prices of the twelve and fifteen 
cent times of cotton, and sugar, coffee, iron, and salt steadily stand at the old rates. If 
to expenditures for these necessary articles, the planter has to add his negro clothes, 
shoes, hats, and blankets, he will have nothing left to remunerate him for his labour. 



See page 68, ante. 



166 



THE HARMONY OF INTERESTS. 



These are really matters which they should ponder over, and a system of planting, which 
does not repay for the labour and investment of capital engaged in it, we reasonably 
think would soon be abandoned. But it will not be. Our planters are taught no other 
systems ; they do not know how they will supply the vacuum which would be made by 
an immediate abandonment of the cotton crop. It would take several years before they 
could perfect, with the strictest economy, those arrangements which would render them 
entirely independent of it as a marketable crop. Therefore the step taken should be 
wisely considered before adopted, and the utmost caution should be observed in making, 
what we sincerely believe would be, if once begun, a radical change in our system of 
agriculture. We therefore advise, for the coming year, a reduction simply of one-third 
of the cotton crop throughout the State — devoting, at the same time, the land thus thrown 
out of the cultivation of this crop to the production of grain and the increase of labour, 
which would thus be given, to the proper manuring and improved tillage of the cotton 
planted and the general improvement of the plantation. By this process the cotton lands 
would be increased in fertility, and the increase of grain which would follow would 
greatly facilitate the rearing of mules, hogs, cattle, and sheep ; and in a short time the 
whole State could render itself independent of the exactions of our Kentucky neighbours, 
who kindly supply us with all such things, simply at the expense of the prosperity of 
our agricultural population ; for, in practice, they annually sweep the country of all the 
surplus cash which is afloat in payment for their bacon and mules. We would, if this 
system were adopted, soon be able to produce as much cotton on fifty acres as we do 
now on one hundred ; and the investment of the agricultural profits of the State at home, 
although they might be small, would have a wonderful influence on general prosperity, 
and build facilities throughout our now desolate and almost unapproachable State, which 
would not only enchain our own sons to her borders, but induce capitalists to come into 
our midst, to make their dollars tell by learning us a lesson of practical enterprise. We 
say to the planters, raise less cotton, more grain, more mules, more hogs ; make your own 
negro clothes ; raise sheep — make your own blankets ; erect tan-yards — encourage shoe- 
makers and hatters ; in fact, artisans of all kinds to settle permanently amongst you ; 
labour at making your soil rich, and do not devote all your energies to wearing it out, and 
soon all things will go well with you. You will not make so many bales of cotton; in 
fact, may not cut such a swell on your factors' books ; but, take our word for it, you will 
have happier slaves, richer lands, more thrift and fewer debts, and sleepless thoughts, to 
harass your hours of rest." 

It is impossible to read this without being struck with the fact, that, while, 
from the exhaustion of her original poor soils, and her inability to clear and 
drain rich ones, that State is unable to produce cotton in competition with 
her neighbours, she is a large importer of other agricultural produce. Her 
chief city is supplied with hay from the North, notwithstanding her abund- 
ance of rich meadow land. She consumes the pork of Ohio, and she uses 
the mules of Kentucky • and thus, while selling her products at the low 
price that is necessarily consequent upon her distance from the place at 
which her food and cotton are to be converted into cloth, she buys of others 
food, mules, &c, at the highest price, because of her distance from the place 
of production. She wastes labour and manure upon the road, and is then 
surprised at the exhaustion that results necessarily from such a course of 
policy. 

The remedy for all this may, it is supposed, be found, first, in diminishing 
the quantity of cotton ; but that is already diminishing so rapidly that the 
great cause of apprehension throughout the State seems to be that its cultiva- 
tion must soon cease, because of inability to produce it. She desires to dimi- 
nish the supply of cotton, while her people are flying from her to seek the 
west, there to produce more cotton. Second, the lands are to be manured, 
but we are not told from whence the manure is to come. The State has 
scarcely any consumers of agricultural produce except those who are engaged 
in its production, and their consumption yields but little manure. Her 
horses are always on the road, wasting the manure yielded by her hay and 
her corn, and her rbe and cotton are consumed abroad, the consequence of 



THE HARMONY OF INTERESTS. 



167 



which is, that of what is yielded by the land nothing goes back, and the 
land and its owner become impoverished together. Her population dimi- 
nishes. Everybody is seeking to find elsewhere a better place for employ- 
ing his capital and his labour. Under such circumstances it is useless to 
talk about artificial manures, and her swamps and river bottoms, in which 
manure has for ages accumulated, will not pay the cost of clearing for the 
raising of three or four hundred pounds of cotton to the acre. Give her a 
consuming population that will make a market on the ground for the tons 
of potatoes, and turnips, and hay, and the milk, and the veal, that will be 
yielded by rich soils, and the State will become one of the richest of the 
Union. It is population that makes food come from the rich soils, as we see 
to be the case in Belgium, and England, and New England j and it is depo- 
pulation that drives men back to the poorer ones, as is shown in Ireland, 
India, South Carolina, and Virginia. The people of Ireland are flying from 
each other as if from pestilence, and yet that unfortunate island, in which 
men are restricted almost entirely to the cultivation of the land, offers us 
now the chief European market for our surplus food, while South Carolina, 
destitute of consumers, is one of the principal markets of populous Ohio 
for her surplus products. Whenever the former shall begin to consume on 
the land the products of the land, she will have manure to keep in cultiva- 
tion her poor soils, and she will acquire ability to clear and drain the rich 
ones, and then she may export hay instead of importing it. Ireland, like 
South Carolina, abounds in rich soils untouched. She has millions of acres 
of bog that could be drained with far less labour, and at far less cost, than 
have been required for similar lands in England, and it is estimated that 
three millions of these acres would afford food for six millions of people; 
but, also, like South Carolina, she is compelled to waste on the road the 
labour and manure yielded by the poorer soils now in cultivation, and is 
thereby rendered too poor to clear and drain the rich ones, which never 
have paid, and never can pay, the cost of preparation, without the presence 
of a consuming population requiring the potatoes, and the turnips, and the 
hay, of which the earth yields by tons, and not by pounds or bushels. 

Had the people of the Southern States, during the last twenty years, been 
making for themselves, out of their own coal, ore, and limestone, an average 
of only 250,000 tons of iron, the quantity made in that time would have 
been five millions of tons, all of which would now be there in the various 
forms of agricultural and manufacturing machinery, railroads, cars, and loco- 
motives, and they would now be adding to the quantity at the rate of half a 
million of tons annually. 

Fifty thousand tons of iron would make almost 500 miles of single track 
road. Let us suppose that they averaged annually but half that quantity, 
and had now, as they might easily have, 5000 miles of road running through 
populous manufacturing villages in which they were converting their cotton 
into cloth or yarn for the supply of the world, and then let us estimate what 
would be the increased value of the landed property of those States. An 
average annual product exceeding that of the present time to the extent of 
only one dollar per acre of the States south of Mason and Dixon's line, would 
represent a capital of six thousand millions of dollars, being perhaps five 
times the present value of their slave population, all of which would be at 
this moment on the highway towards freedom as their masters were making 
their way towards fortune.* 

Instead of pursuing a course that would have enabled them to profit by the 

* Emigration from the r*ch lands of the older States of the South would then cease, and 
immigration would begin, and thenceforth the increase in the value of land would be 
immense. 



168 



THE HARMONY OF INTERESTS. 



magnificence of their position, the planters have allowed themselves to 
be taxed for the maintenance of the people of England, who produce little 
themselves, and have therefore but very little to give in exchange for the vast 
mass of agricultural products they receive, the consequence of which is, that 
their customers are becoming poorer every day, and they themselves are fast 
passing towards a state of exhaustion similar to that they have produced in 
Ireland, India, the West Indies, and every other country that has been com- 
pelled to submit to their most unnatural system. A writer 7 describing the 
present position of affairs, says : — 

« As a disinterested spectator of events, I assure you that during a residence of nearly 
ten years in England, I have not seen the different branches of trade in so disastrous a 
position as they are at present; and from the petty dealer to the wholesale tradesman, ] 
have never heard so many complaints about the wretched state of trade, not only in the 
metropolis, but generally throughout the country. I place more confidence in the state- 
ments of a dozen respectable tradesmen than I do in 'trade circulars,' which are usually 
got up to serve certain interests, or to cover the real truth, and incite speculation. If I 
were to give an impartial opinion, I should unhesitatingly say that the repeal of the corn- 
laws, the repeal of the navigation laws and the railway mania, have together produced 
the present panic — for it is useless to say that there is not a panic ; the leading men of 
nearly every class declare it by their looks, their words, and their actions. 

" The parish of St. Clement's Danes, one of the richest parishes of the metropolis, where 
I am now residing, shows the real condition of the general trades-people of London. 
The Church-warden of this parish recently informed me that three applications had been 
made to the parishioners for the amount of their poor rates and other taxes, and not more 
than one in twenty had paid their bills, and he intended to issue summonses against the 
delinquents. He also remarked, that during a residence of eighteen years in this parish, 
he had never known trade to be so dull as it is now." 

What prospect there is of improvement may be gathered from the follow- 
ing extract from a journal that is the highest free-trade authority in Eng- 
land : — 

» We may not unreasonably fear, therefore, that, so far as Ireland is concerned, a con- 
siderable source of the progressive increase of the population and wealth of the empire 
is much diminished, if not absolutely dried up. Other sources of increase have, at the 
same time, been opened to us ; but whether these will balance, or more than balance, the 
loss occasioned by the condition of Ireland is more than we can say. For many years 
the condition of the population there was gradually deteriorating, while their numbers 
increased ; that terrible process has at length reached its climax, and the present genera- 
tion has to sustain the deteriorated, and we fear demoralized mass^ without any imme- 
diate hope of their being restored to habits of productive industry. It seems right to put 
all classes at once on their guard, lest the decrease of population noticed in the last 
quarter, may, from the causes we have mentioned, be an index to a permanently slower 
increase in population than has hitherto taken place." — Economist (Zonrfow.) 

With such a state of things the consumption of our products cannot 
increase. The question to be answered is, " Can it even be maintained V 
Whenever population diminishes in its ratio of growth, it is an evidence of a 
deterioration of condition, and when that is going on, the first effect is felt in 
the diminished demand for clothing, for food is the want that must be first 
supplied. 

Let it but be known that the people of this country, North, South, East, 
and West, are determined/that the seat of the cotton and iron manufactures 
of the world is to be here, and the transfer of men and machinery will 
be such as to exceed all present calculation, and every man that comes will 
consume three, four, five, six, or twelve times as much cotton as at present, 
while taking all his food from our own farmers, who then will consume three 
pounds where now they consume but one. The remedy for all the grievances 
of the planters is in their own hands, and it lies in the pursuance of a policy 
advocated by the fathers of the Revolution and by every chief magistrate of 



THE HARMONY OF INTERESTS. 



169 



the Union, from Washington to Jackson, and of all of them but two were 
from south of Mason and Dixon's line, and all but those two elected by the 
same party that now repudiates protection. 

Of all the chapters in the history of the people of this Union, the most 
honourable to them, as I believe, is that in which is recorded the history of 
the negro race. The three hundred thousand barbarians imported into this 
country are now represented by almost four millions of people, far advanced 
towards civilization and freedom, and to that number they have grown 
because they have been well fed, well clothed, well sheltered, and reasonably 
worked. It is a case totally without a parallel in the world, the history of 
which may be challenged for the production of a body of men invested with 
so much power over their fellow-men as has been exercised by the people of 
the South, and using it so moderately as to permit so rapid an advance in 
numbers and so great an improvement of condition. 

Nevertheless, they are unceasingly stigmatized as slave-drivers and negro- 
breeders, and by the nation which lives out of them, and which of all the 
nations of Europe possessing colonies has most misused its power over the ne- 
gro race, because the only one which has established laws prohibiting the 
consumer and the producer from taking their places by each other. It was 
remarked many years since, by an intelligent English traveller,* that to the 
French islands men went to remain and to exercise trades, but to the Eng- 
lish ones they went only to endeavour to make fortunes, and then return. 
So has it everywhere been, and what have been the results ? In India, poverty 
the most extraordinary, and a succession of famines and pestilences without 
a parallel ; in the West Indies, a waste of life equally unparalleled, requir- 
ing constant importations for the mere maintenance of their numbers. From 
1817 to 1829, a period of twelve years, the slaves of Jamaica were reduced 
in numbers, by death alone, ten per cent. ; whereas had they been here they 
would have increased thirty per cent. The number imported into that one 
island could not have been less than double that imported into this Union, 
and yet, while the larger number is at this day represented by three hundrea 
thousand, the smaller is represented by almost four millions. The slave 
chapter of British history is as disgraceful as that of the Union is honourable. 

That slavery even yet exists among us, is due to the monopoly system 
which has destroyed the value of land in Ireland, India, the West Indies, 
and all other of the British colonies, and yet the nation by which that sys- 
tem was instituted heads the crusade against slavery, while converting the 
freemen of Ireland and India into slaves, and denouncing the planters, at 
whose expense she lives, as unworthy to be received into the society of free- 
born Englishmen ; and those very planters are united in the support of the 
system by which they are impoverished, and the people by whom they are 
thus denounced ! 

The following article on the position and prospects of the cotton trade, 
received at the moment that the above was in the press, so fully confirms the 
views given in a previous chapter, that I am induced, long as it is, to reprint 
it at full length. It is from the London Economist,^ the highest free-trade 
authority in Europe : 

" The quarters whence Great Britain draws her supply of raw cotton may be classed 
under five divisions: — North America, Brazil, Egypt, India, and Miscellaneous Countries, 
chiefly our own colonies. On the increase of production in these lands, and on the pro- 
portion of that increase which is sent to this country, depends our capability of extending 
our cotton manufacture, or even of maintaining it at its present level. Let us therefore 
consider each of these sources of supply in turn, that we may be able to form a fair esti- 

* Coleridge. Six Months in the West Indies. + Dec. 1. 1849. 

22 1 



170 



THE HARMONY OF INTERESTS. 



mate of our expectations from each. North America, as the most i noortant, we will leave 
to the last. 

Brazil is the chief source whence we draw our supply of long -stapled cottons. Brazil 
has sent us as follows : 



Brazil Cotton. 

Bales imported in five years. Bales imported per annua*. 

1830— 1834, inclusive . 744,884 .... 148,977 

1835—1839 — . . 643,438 .... 128,087 

1840—1844 — . . 471,226 .... 94,245 

1845—1849 — . . 495,685 .... 99,137 



In this and the succeeding tables the imports for 1849 have been found by adding tc 
the known imports for the first ten months, the quantity we have yet reason to expect, oi 
that which ordinarily arrives in November and December. 

From Brazil, therefore, our annual supply has diminished nearly 50,000 bales ; or if we 
compare the two extreme years of the series, 1830 and 1848, the falling ofl" is from 
192,267 bales to 100,244, or 92,000 bales. 

Egypt. — Our Egyptian supply, which is also long-stapled cotton, has ranged as fol 
lows : — 

Egyptian Cotton. 

Bales imported in five years. Biles imported per annum. 

1830—1834, inclusive . 99,899 .... 19,899 
1835—1839 — . . 173,031 .... 34,606 
1840—1844 — . . 207,913 .... 41,583 
1845—1849 — . . 224,579 ... . . 44,918 
The supply from Egypt, however, seems to have reached its maximum in 1845, ir. 
which year we received 81,344 bales. This year it does not reach half that amount 
Moreover, this country, from the peculiar circumstances of its government, is little to be 
relied upon, — the supply having varied from 40,290 bales in 1832 to 2,569 bales ir 
1833; and again from 18,245 bales in 1842, to 66,000 bales in 1844. 

From Other Quarters, chiefly the West Indies, the supply has been : — 



Miscellaneous. 

Bales imported in five years. Bales imported per annum. 

1830—1834, inclusive . 68,873 .... 13,775 

1835—1839 — . . 161,369 .... 32,274 

1840—1844 — . . 117,887 .... 23,577 

1835—1849 — . . 44,833 8,966 



East Indies. — Our supply from this quarter varies enormously, from 90,000 to 270,000 
bales per annum, inasmuch as we only receive that proportion of the crop which our 
prices may divert from China or from internal consumption. Our imports thence have 
been as follows. 

East India Cotton. 

Bales imported in five years. Bales imported per annum. 

1830—1834, inclusive . 403,976 .... 80,795 

1835—1839 — . . 723,263 . . . . 144,653 

1840—1844 — . . 1,167,294 .... 233,459 

1845—1849 — . . 899,213 .... 179,852 

The summary of our supply from all these quarters combined is: — 

Summary. 

Imports in five years. Imports per annum. 

1830—1834, inclusive . 1,317,632 .... 263,526 
1835—1839 — . . 1,701,101 .... 340,220 
1840—1844 — . . 1,964,320 .... 392,864 
1845—1849 — » . 1,664,310 .... 332,862 
The result of this inquiry, then is, that our average annual supply from all quarters, 
except the United States, was in five years ending 1849 less by 7,358 bales than in the five 
years ending 1839, and less by 60,000 bales than in the five years ending 1844. Of this 
diminished supply, moreover, we have been exporting an increasing quantity, viz : — 396,000 
bales in the last five years, against 342,000 t iles the previous five years. 



THE HARMONY OF INTERESTS. 



171 



1830—1834, inclusive 
1835—1839 — 
1840—1844 — . . 
1845—1849 — 



UariTEB States. — We may now turn our attention to our last and main source of sup* 
ply, America, which has sent us : — 

American Cotton. 

Imports in five years. Imports per annum. 

3,241,958 .... 648,391 
4,308,610 .... 861,722 
5,802,829 .... 1,160,566 
6,188,144 .... 1,237,619 
The last five years, it should be observed, include the three largest crops ever known, 
one very deficient, and one rather so. 

It is a known and admitted fact among those conversant with these matters, that a 
price of 4<f. a lb. for middling uplands, laid down in Liverpool, leaves sufficient profit to 
the American planter to induce him to grow as much cotton as his negroes can gather ; 
and that, therefore, as the average price has scarcely ever ranged so low as this for any 
great number of weeks, the possible increase of the crop of cotton will keep pace with the 
actual increase of the Negro population ; and cannot do more. Now the negroes increase 
at a very regular rate of 3 per cent, per annum. If, therefore, these premises be correct, 
it will follow that the cotton crop of each year will surpass that of each preceding year 
of equally favourable conditions (i. e., as to good planting and picking weather, late frosts, 
freedom from worms, inundations, &c.) by 3 per cent. Accordingly, we find this to have 
been pretty closely the case, as the following tables will show. The years 1840, 1843, 
and 1845, were very favourable years for the growth and gathering of cotton. Let us 
see what crop each of these years, calculated on the above bases (3 per cent, yearly in- 
crease,) would give for 1849, also a favourable year: — 

Actual crop. No. of yearf. 

1840 . . 2,178,000 . .9 
1843 . . 2,379,000 . .6 
1845 . . 2,394,000 . .4 



Per cent 
27 
18 

12 



Estimated crop of 1849. 

2,866,000 
2,807,220 
2,681,280 



Average 



2,784,833 
2,730,000 



Actual crop ........ 

From the following table it will be seen that, assuming the year 1838 as a starting 
point, the average increase of the American crop for the last 12 years has not quite 
reached 3 per cent. : and in fact wherein for any short series of years this rate has been 
exceeded, it has been attributable simply to an unusual run of favourable seasons 



Fear. 

1837— 38 

1838— 39 

1839— 40 

1840— 41 

1841 — 42 

1842— 43 

1843— 44 

1844— 45 

1845— 46 

1846— 47 

1847— 48 

1848— 49 

1849— 50 

Average 



What the crop would have been with 
no extraordinary casualties, and increasing at 
the rate of 3 per cent, yearly. 



1,855,500 
1,911,200 
1,968,500 
2,027.500 
2,088,300 
2,151,000 
2,215,000 
2,282,000 
2,350,500 
2,421,000 
2,493,000 
2,568,300 



Actual crop. 

1,801,500 
1.360,500 
2,178,000 
1,635,000 
1.683,500 
2,379,000 
2,030,500 
2,394,500 
2.100,500 
1.778,500 
2,347,500 
2,728,500 

2.350,000 estimated 



2,080,500 



2,194,400 

It is clear, then, that we shall be sufficiently near the mark for any practical conclu- 
sions, if we assume the average increase of the American cotton crop at 3 per cent, per 
annum, barring any unusual freedom from, or occurrence of, disasters, such as sometimes 
happen. Let us new inquire what proportion of this increase will fall to our share. 

The consumption of the United States itself has been steadily on the advance, and 
now increases at an average annual rate of about 35,000 bales. It is now about 520,000 
bales yearly. That of the continent now reaches (of American cotton) about 700,000 
bales. America and the continent, therefore, require about 1,200,000 bales at present, 
and will require more each year. Moreover, they will always take precedence of Great 



172 



THE HARMONY OF INTERESTS. 



Britain, as their margin of profit is larger, and a small increase of price is of less conse- 
quence to their manufacturers than to ours, and checks consumption less. The following 
table will throw much light on this question : 

Crop of Import of American cotton Export of American cot- American cotton retained 

5 Years. American cotton. into Great Britain, ton from Great Britain. for home consumption. 

1840—44 . 9,905,638 . 5,802,829 . 295,600 . 5,507,229 
1845—49 . 11,349,921 . 6,188,144 . 596,640 . 5,591,504 

Increase . 1,444,283 . 385,315 . 301,040 . 84,275 

From this table it appears, that, while the groioth of American cotton in the last five 
years exceeded that of the previous five by the unprecedented quantity of nearly one 
million and a half of bales, of this increase only 385,000 reached this country, and of 
this we had to re-export more than three-fourths, leaving an annual increase available for home 
consumption of only 17,000 bales. For any augmentation of consumption beyond this, 
we have been drawing on our stocks. 

We will now bring into one view the whole supply and the whoh consumption of all 
kinds of cotton in Great Britain during the last ten years : 



1840—44 
1845—49 

Increase 

Decrease 



Bales im- 
ported from all 
quarters. 

7,767,149 
7,852,454 



85,305 



Bales 
exported. 

637,650 
992,850 



355,200 . 



Retained 
for home con- 
sumption. 

7,129,499 
6,859,604 



269,895 



Supply for 
home consumpt'n 
annually. 

1,425,900 
1,371,920 



53,980 



Actual con- 
consumption 
annually. 

1,290,480 
1,477,360 



186,880 



Actual con- 
consumpt'n 
weekly. 

24,810 
28,410 



3,600 



We have taken the actual consumption of 1849 at 1,650,000 bales only, for reasons 
hereafter stated. 

Now, bearing in mind that the figures in the above tables are, with scarcely an exception, ascer- 
tained facts, and not estimates, let us sum the conclusions to which they have conducted 
us ; conclusions sufficient, if not to alarm us, yet certainly to create much uneasiness, and 
to suggest great caution on the part of all concerned, directly or indirectly, in the great 
manufacture of England. 

1. That our supply of cotton from miscellaneous quarters (excluding the United States) 
has for many years been decidedly, though irregularly, decreasing. 

2. That our supply of cotton from all quarters, (including the United States,) available 
for home consumption, has of late years been falling off at the rate of 1,000 bales a week, 
while our consumption has been increasing during the same period at the rate of 3,60Q 
bales a week. 

3. That the United States is the only country where the growth of cotton is on the 
increase ; and that there even the increase does not on an average exceed 3 per cent., or 
80,000 bales annually, which is barely sufficient to supply the increasing demand for its 
own consumption, and for the continent of Europe. 

4. That no stimulus of price can materially augment this annual increase, as the plant- 
ers always grow as much cotton as the negro population can pick. 

5. That, consequently, if the cotton manufacture of Great Britain is to increase at all. 
on its present footing, it can only be enabled to do so by applying a gieat stimulus to the 
growth of cotton in other countries adapted for the culture. 

Within the memory of many now living, a great change has taken place in the coun- 
tries from which our main bulk of cotton is procured. In the infancy of the manufac- 
ture, our chief supply came from the Mediterranean, especially from Smyrna and Malta. 
Neither of the places now sends us more than a few chance bags occasionally. In the 
last century, the West Indies were our principal source; in the year 1786, out of 
20,000,000 lbs. imported, 5,000,000 came from Smyrna, and the rest from the West 
Indies; in 1848, the West Indies sent us only about 1,300 bales; in 1781, Brazil began 
to send us cotton, and the supply thence continued to increase, though irregularly, till 
1830, since which time it has fallen off to one-half. About 1822, Egyptian cotton began 
to come in considerable quantities, its cultivation having been introduced into that coun- 
try two years before. The import exceeded 80,000 bales in 1845; the average of 
the last three years has not been a third of that quantity. Cotton has always been grown 
largely in Hindostan; but it did not send much to England till about thirty years ago. 
In tVe five years ending 1824, the yearly average import was 33,500 bales; in 1841, it 
leached 274,000, and may now be roughly estimated at 200,000 bales a year. 



THE HARMONY OF INTERESTS. 



173 



Now, what is the reason why these countries, after having at one time produced so 
largely and so well, should have ceased or curtailed their growth within recent years? 
It is clearly a question of price. Let us consider a few of the cases : 

Lowest Fall Lowest Fall Lowest Fall Lowest Fall 

At the close price of per. price of per price of per price of per 

of the years Pernambuco. ct. IVfaranham. ct Egyptian. ct. Sural, cent. 

1836— 39 inclusive 9$d. — S}d. — 10£d — 4£rf. — 
1840—43 7 — 5f — 7 — 3£ — 

1844—48 5$ 36 4$ 42 5| 43 2f 40 

Here, surely, may be read the explanation of the deplorable falling off in our miscel- 
laneous supply. From the four years ending 1839, when the great stimulus was given 
which, procured us so ample a supply during the succeeding period, to the quinquennial 
period ending 1848, there has been a fall in price, on an average, of 40 per cent. Un- 
less, therefore, we assume either an enormous margin of profit in the earlier period, or an 
extreme diminution in the cost of producing the article of late years, such a fall in price 
would be quite sufficient to direct capital and industry into other channels, and to prevent 
so bulky an article as cotton from being grown or forwarded. 

In both Brazil and India, freight and carriage form an inordinate proportion of the 
price of cotton. In both countries the bales are carried great distances on the backs 
of mules or other beasts of burden. The deficiency of good roads, convenient vehi- 
cles, and safely navigable rivers, in the cotton districts of both countries, swells the 
expense of bringing the bales to the shipping ports to such an extent, that, when prices 
are low in England, the ultimate net remittance to the planter is quite insufficient to re- 
pay the cost of growing, picking, and packing. In some years, the price of much of the 
Surat cotton sent to this country was so low as only to remit one penny a pound to the 
shipper at Bombay; and by the time this reached the actual grower, it had probably 
dwindled away, through the expenses of carriage, to a sum inadequate even to pay the 
government rent. Our supply from both these countries will depend entirely upon price. 
In Brazil, where we believe the sugar cultivation is less profitable than formerly, a range 
of prices 50 per cent, higher than those of the last few years would probably induce the 
planters to increase their cotton grounds, and would repay them for so doing. In regard to 
the East Indies, where large quantities are always grown, our supply thence depends upon 
two things — first, the demand for China, which is usually supplied before Great Britain ; 
and, secondly, on the question whether the net price at Bombay or Madras will pay for 
picking, cleaning, packing, and transporting to the coast. Under the stimulus of high prices, 
(such as prevail at this moment,) large quantities, would, we doubt not, be sent forward ; 
and the price that will be requisite to secure such large supplies will diminish as the 
means of carriage are increased and cheapened. If the prices of the last five years 
continue, we believe there can be no doubt that the supply will inevitably continue to 
fall off. 

We do not, however, participate in the sanguine expectations which many parties en- 
tertain, that even with higher prices the quantity and quality of East Indian cotton sent 
to this country can progress so rapidly as to render us at all independent of the Ameri- 
can supply. For, in the first place, the absence of good roads or navigable rivers in the 
cotton districts, the length of time and expenditure of capital needed before the want of 
those can be supplied by the establishment of railroads, and the languid and unenterpris- 
ing character of the people, must necessarily cause any material increase of supply (at 
least over 250,000 bales per annum) to be a matter of very slow and costly operation. 
And, in the second place, the quality of the cotton grown in India is peculiar ; and this 
peculiarity is still traceable, though in a modified degree, in whatever locality and from 
whatever seed the plant is grown, even in the best specimens (improved as they unques- 
tionably are) which have of late been sent to this country; and this peculiarity will 
always, we fear, prevent it from being substitutable for American cotton, except to a very 
limited extent. 

Our hopes lie in a very different direction; we look to our West Indian, African, and 
Australian colonies, as the quarters from which, would government only afford every 
possible facility, (we ask and wish for no more,) we might, ere long, draw such a supply 
of cotton as would, to say the least, make the fluctuations of the American crop, and the 
varying proportion of it which falls to our share, of far less consequence to our pros- 
perity than they now are. 

The West Indies, as we have already seen, used to send us, sixty years ago, about 
40,000 bales, or three-fourths of our then supply. But the enormous profits realized on 



174 



THE HARMONY OF INTERESTS. 



the growth of sugar, partly caused, and much prolonged, by our prohibitory duties on all 
competing sugars, directed the attention of the colonists exclusively in that direction. As 
in the analogous case of protected wheat in this country, other cultivation was gradually 
abandoned in favour of a single article ; the cane was grown in soils and localities utterly 
unfit for it, and into which nothing but the protective system could have forced it, and 
cotton was soon altogether neglected. Many parts of the West Indies, St. Vincent espe- 
cially, which are worst adapted for the cane, are the best adapted for the cotton plant, 
which flourishes in light and dry soils, and especially near the sea-coast. The artificial 
stimulus which our mistaken policy so long applied to sugar cultivation, having been 
withdrawn, it must be abandoned in all unsuitable localities, and would be well replaced 
by cotton. What price would be required to repay its culture there, we cannot say; 
but considering at how small a cost it might be placed on ship board in all these 
colonies, and how large a portion this item generally forms of ihe whole expense 
of production, we cannot see why cotton should not be grown in the Antilles as 
cheaply as in the United States, if only the negroes can be relied upon for steady and 
continuous labour during the picking season. Now, the price o/ West Indian cotton 
ranges higher than that of the bulk of the American crop, as being longer in staple. Our 
belief is, that were the attention of our planters once energetically directed to this article, 
they might soon send us a regular supply of 100,000 bales per annum, and thus find a 
use for many estates that must otherwise be* abandoned. 

The experiment of cotton growing has already been tried with success in one of our most 
hopeful African colonies — Port Natal. We have already received above 100 bales from 
this colony — the main portion of which consists of the indigenous cotton, very similar to 
that shipped from New Orleans, clean, fine, tenacious, but of a light brown colour. On 
the whole, it is a most admirable article for ordinary purposes, and worth in the market 
to-day nearly Id. per pound. The remainder of the shipments have been grown from 
the sea-island seed, and are of excellent quality. The cultivation is rapidly increasing, 
and about 500 bales are expected next year from the colony. A society has been formed 
for promoting emigration thither, and a ship full of emigrants sailed a few days since. 
Mr. Byrne, the agent, says : 

" Natal is situated in a sunny and bright region. It has iron, lead, coal, and copper in 
abundance, and with British industry might be made one of the finest and wealthiest 
countries on the globe. The country is admirably calculated for the growth of cotton, 
some of which is of a superior description. In America, cotton was chiefly cultivated 
by slave-labour at a cost of about 351. a year for each slave ; whereas at Natal the labour 
of the Zooloos could be purchased at a cost of 10s. a month ; and Natal too, from its 
proximity to the sea, was most advantageously situated for carrying on the trade with 
England in competition with the States. I would not advise you to cultivate sugar; you 
will be able to get that article perhaps better from the Mauritius, where you will find a 
highly remunerative market for all agricultural produce. I intend in the beginning of the 
year to send out a screw steamer to run to and from that island and Natal." 

From Australia we have as yet had no bulk of supply, but several acres are under 
cultivation, and the samples sent are of so fine a quality as to prove beyond question the 
adaptation of the soil and climate for the production of as good an article as any grown 
in America. We have now lying before us, along with the Port Natal cotton, samples 
of some grown from sea-island seed at Bolwarra, in New South Wales, near Maitland, 
about 80 miles north of Sydney. It is long, fine, and silky. 

We believe that, under due encouragement, the cultivation of cotton in these quarters 
might increase in a steady ratio equal to our increasing demand. Let us now see, on a 
summary, how the matter stands. 

We have seen that of the American cotton crop, our annual supply during the last five 
years has nearly reached 1,120,000 bales, and that, the yearly increase of the crop being ba- 
lanced by the yearly increasing demand for the United States and for the continent, there is little 
probability of our ever getting more than this on an average. Let us suppose that a due 
advance in price raises the production of Brazil to what it had attained in 1830, and that 
of India nearly to what it was in 1841, and that Egypt and our own colonies will again 
send us some appreciable and increasing imports : 



Bales per annum. 



United States 



say 1,200,000 



Brazil 
India 
Egypt 



200,000 
250,000 
50,000 
50,000 



Our colonies 



1,750,000 



THE HARMONY OF INTERESTS. 



175 



This would allow us a supply of 33,500 bales a week, the apparent consurnotion of 
this year. For any addition to' tlrs we must depend on the increase at tne colonial sup- 
ply, or on that which a still higher range of prices will enable us to w.v..g out of India 
and Brazil. The conclusion from the whoie clearly is, that, in order to secure such a 
supply of the raw material as is needed to meet our own present consamotjon. we must 
be prepared to pay a decidedly higher range of prices than has of late years obtainea ; that, in fact, 
the average prices of the last five years have proved quite inadequate, in spite of large 
cropr in America, to draw to this country sufficient cotton to enable our actual machinery 
o work full time. Higher prices, therefore, must obtain in future ; nor snould spinners 
and manufacturers wish it otherwise; for experience has fuUy shewn them that no cir- 
cumstances can cause them so great or so certain a loss as fen inadequate supply of the 
raw material, and higher prices can alone avert this supreme evil. 

So much as to the probable sufficiency of the supply of the raw material to this coun- 
try, on the supposition that the consumption is what U appears to be, and will continue what it is. 
But are we justified in these two assumptions ? Let us put together a lew facts which 
bear upon the question. 

And, first, let us ascertain what the actual consumption has been during the last ten 
years. We know this with accuracy for nine years, and for the first ten months of this 
year. During these ten months, the deliveries to die trade have reached 1,495,000 bales. 
But we know that, during the latter portion of this period, manufacturers have been pur- 
chasing far more than they need for actual use, and that, while the actual quantity worked 
up has, in consequence of a general tendency towards the production of finer fabrics, 
been decreasing since the beginning of June, the purchases of cotton have been inn-easing, 
till, in October, they reached the unprecedented amount of 217,000 bales. A lull has 
now taken place, and we believe we shall not be far wrong in assuming that the pur- 
chases of the trade, during the last nine weeks of this year, will not exceed 205,000 
bales ; and that, in that case, they will hold at the end of the year 50,000 bales more 
than usual in stock. This would give the consumption of the year at 1,650,000 bales. 
Our own impression is, that this estimate is rather over than under the mark, and that 
spinners hold a larger stock than we assume ; but, in any case we cannot be sufficiently 
wide of the truth to affect our conclusions. 

Weekly censumption of Weekly consumption of 

cotton in Great Britain. Year. cotton in Great Britain. 



Year. cotton in Great 

1840 .... 24,868 

1841 .... 22,134 

1842 .... 22,949 

1843 .... 26,693 

1844 .... 27,439 



1845 .... 30,120 

1846 . ... . 30,000 

1847 .... 21,270 

1848 .... 28,950 

1849 .... 31,730 



Now, we wish our readers to consider this table carefully, and notice the extraordinary 
fluctuations in the quantity of cotton worked up each year, in connection with the facts we 
are about to state. The weekly average fell nearly 3,000 bales from 1840 to 1841; then 
jumped up^ nearly 4,000 bales from 1842 to 1843; in 1845 and 1846, it remained sta- 
tionary at aiiigh figure ; and (passing over for obvious reasons the anomalous year of 
1847) it had again fallen in 1848, when the quantity only exceeded that of eight years 
previously by 4,000 bales. Yet, during the whole of this period, the machinery engaged in the 
cotton manufacture was constantly, though not regularly, increasing ; and, except for a short 
period in 1842, (and in 1847, which last year we have thrown out of our calculation,) 
the mills were, we believe we are correct in stating, all at full work. Indeed, « short 
time" is attended with too tremendous a loss to the mill-owner ever to be resorted to, ex- 
cept under the direst pressure. During the last year, we see the consumption has in- 
creased nearly 3,000 bales a week, though the hours of labour have been reduced, by 
legislative enactment, from eleven to ten per diem. 

All these considerations point clearly to the conclusion, that our consumption of the raw 
material is not a fixed, but a varying quantity, and is affected by some other causes than 
either the amount of machinery in operation, or the hours during which it is employed. 
What this cause is, and the extent to which it is capable of operating, we can be at no 
loss to discover. 

The weight of raw cotton consumed by a given amount of machinery varies according 
to the nature of the article produced. We produce in England fabrics of which the raw 
material forms two-thirds of the value, and fabrics of which it forms not one-fiftieth of the 
value. We spin yarns of which the raw materials cost three-fourths, and yarns of which 
it costs one-twentieth, of the finished price. We have spindles that produce two pounds 
Pi yam a week, and spindles that do not produce two pounds a quarter. But, witnout 



176 



THE HARMONY OF INTERESTS. 



going to these extreme varieties, we will here copy a statement made by Messrs. Du Fay 
& Company in their monthly circular, the accuracy of which we can fully confirm. 
They say : 

840 spindles, working 20's twist, will consume 1,340 lbs. of cotton 
840 « « 30 s « « « 840 « 

840 « « 40's « « « 525 « 

840 « « 60's « " « 224 « 

Now, though machinery accustomed to produce No. 20's cannot produce No. 60's, yet 
it can, without material change or difficulty, produce No. 30's; and machinery adapted 
for No. 30's can change to No. 40's, and so on. In fact, every mill has a range of at least 
ten numbers, by varying whiqh it can reduce or augment its consumption of cotton easily 
from 25 to 50 per cent. The same may be said of weaving mills. In many mills, looms 
may be seen working side by side of the same construction, some of which produce 60 lbs. 
a week, and others only 25 lbs. We could mention at least one mill where the amount 
of raw cotton worked up weekly varies, according to the fineness of the article produced, 
to meet the fluctuating demands of the market, from 30,000 lbs. to 18,000 lbs.; and we 
find in the Manchester Guardian of last Saturday the following corroborative statement: 

" Some idea of what a change of numbers wil\ effect may be gathered from the fol- 
lowing instances ; the names of the firms are before us : 



Previous weekly. 
Reduction. consumption 

No. 1 10,000 lbs. out of 40,000 lbs. 

No. 2 1 8,000 lbs. — 60,000 lbs. 

No. 3 25,000 lbs. — 115,000 lbs. 

No. 4 " . 10,000 lbs. — 30,000 lbs. 

No. 5 10,000 lbs. — 30,000 lbs. 

No. 6 70 bis. — 120 bales. 



We have been informed by another very extensive spinner, that the reduction in his esta 
blishment is more than 40,000 lbs. per week." 

It is not easy to ascertain the extent to which this change from coarser to finer numbers 
is actually carried at any particular period. We know, however, that it does go on to a 
very great extent, and has done so, perhaps almost unprecedentedly, during the last six 
months; and, when we consider the immense proportion of the weight of cotton used in 
England, which is consumed by the makers of heavy cloths and coarse yarns, we think 
we may safely affirm that a brisk demand for printers, shirtings, and India yarns on the 
one hand, with a dull demand for domestics, long-cldths, and German yarns on the other, 
or a reversal of these conditions of the market, if continued for any time, will make a 
difference of at least 25 per cent, in the weight of raw cotton consumed. 

Now, an advance in the price of cotton is much more strongly felt in the coarser yarns 
and the heavier cloths than in the finer ones. An advance, such as has taken place in 
the last twelve months, of nearly 3d. per lb. on the raw material of a stout calico which 
ordinarily sells in the finished state, at 8c?. per lb. is nearly 40 per cent, on the manufac- 
tured article. On a printing cloth, or a fine shirting, which sells at 12c?. per lb. it 
is only 25 per cent. ; and on the piece when printed, it is far less than this — in fact a mere 
trifle. Or, to put it in a still clearer light, an advance of 3c?. per lb. on a heavy domestic 
calico, will compel the purchaser to pay 4c?. where he formerly only paid 3c?. per yard. 
The same 3c?. per lb. will be 15c?. on a piece of printing cloth 30 yards in length, which, 
when printed, sells in the shops at about 12s. 6c?. ; in other words, it will raise the price 
to the customer from 5c?. to 5£c?. per yard. Now, this advance, which is only ten per 
cent., is not sufficient materially or rapidly to check consumption; the other advance, 
which is 40 per cent, is. It is clear, therefore, that an advance in the price of the raw 
material will check the demand for, and consequently the production of, heavy fabrics, 
much sooner and more decidedly than that of light ones. Accordingly, as the following 
table will show, the range of prices is more limited in the former than in the latter ; and 
never keeps pace with, or nearly so, that of the raw material : — 



Price 


per lb. of the following articles in November. 
1845. 1846. 1847. 1848. 


1849. 


Extreme 
range. 




d. 


d. 


d 


A 


d. 


d. 


Raw cotton, fair uplands . 


. 4f 


6 


H 


4 


6* 


2j 


No. 20's water twist, good seconds 


9 


8tr 


n 


H 


a* 


2| 


No. 40's mule twist, fair seconds 


. 10 


H 


H 


7 




3 


Stout domestics, 18£ lbs. for 60 yds. . 


. 9£ 


H 




8 


H 


Medium domestics, 12 lbs. for 60 yds. 


. 11| 


UJ 


H 


»* 


10 




Printing cloths, 27 in. 72 reed, 5 lbs. 2 oz. 


13 


13* 


m 


10| 


141 


H 


It is obvious from this table that while 


printing cloths 


have a 


range 


of price even 



exceeding that of raw cotton, and find no difficulty, where there is a reasonably brisk 



THE HARMONY OF INTERESTS. 



177 



trade, in following its fluctuations, the very reverse is the case with heavy domestics, into 
which a very disproportionate bulk of the raw material is worked up, when compared 
with the machinery employed. For these last-mentioned articles there is a very extensive 
demand at low prices; but with any material advance, this demand immediately falls off. 
A great proportion of them is exported in the form of T cloths and long-cloths to Por- 
tugal, the Mediterranean, and the Levant, as long as prices range about Sd. a lb. — when 
it approaches QoJ, this export is almost wholly suspended, and the manufacturers who 
ordinarily supply it, are compelled to turn their attention to other fabrics. 

Another cause contributes to this change. In unprofitable years, such as always occur 
when the raw material is deficient in quantity and has rapidly become enhanced in 
value, (as in the present year,) every manufacturer is of course anxious both to minimize his 
loss, and to make his capital go as far, and last as long, as he can. It is evident that this 
will be best effected by turning his machinery to the finest range of numbers it is fitted 
to produce, and working up (say) 20,000 lbs. instead of 30,000 lbs. of cotton weekly. 
Moreover, in years when trade is dull, and when manufacturers, from inability to sell, 
are compelled to accumulate stocks, the same inducement to produce as fine fabrics as 
possible is still more strongly felt. A manufacturer with 500 looms on light printing 
cloths can afford to hold a stock of 50,000 pieces, or four months' production, but a manu- 
facturer with 500 looms must have a much larger capital who can afford to hold 25.000 
pieces, or four months' production of heavy domestics. In round numbers, the first would 
have 12,000/. and the second 18,000/. locked up. 

From a combination of all the above considerations — from observing that this change 
from coarser to liner fabrics has often occurred in the past — from knowing how easily, 
and to what an extent, it may be effected — and from perceiving the vast inducement 
which such a rise in die value of cotton as has recently occurred offers to this change — 
we feel no doubt that such change has, during the last six months, been carried to a far 
greater extent than is generally estimated ; and we question whether the actual con- 
sumption is at this moment within 5000 bales per week of what it appeared to be in May 
last, nor within 3000 of what it actually was. We feel convinced, too, that with our 
present and future prospects as to the supply and price of the raw material, as developed 
in the early part of this paper, our manufacture must run more than it has done of late 
years upon the finer yarns and fabrics, and consequently that our consumption of cotton 
(till the supply from miscellaneous quarters has been greatly augmented) must tend to 
decrease rather than otherwise, notwithstanding the increase and improvement of ma- 
chinery ; that (to sum up the whole) those speculators who refuse to believe in a diminished, 
consumption, and those manufacturers icho refuse to face the fact of an inadequate supply, will find 
themselves eqttally in error, and in danger. We particularly call the attention of the latter 
parties to the consideration that the better or worse accounts of the coming American 
crop in no degree affect our argument. We have assumed it at 2,350,000 bales — the 
highest estimate being 2,400.000 bales. 

There are yet other reflections which tend to corroborate this conclusion. We are not 
without indications that we have over-estimated and outrun the demand for the manufac- 
tured article from our existing markets, as much as we have outrun the supply of the raw 
material from existing sources. It is probable that the world's requirement of cotton 
goods about keeps pace with the world's growth of cotton wool. But unfortunately our 
machinery has increased faster than either. We can produce more calico than is wanted, 
and we can consume more cotton than is grown. We think that, in endeavouring 
to ascertain this, we may safely take the data of the last five years as our basis, since, 
though the demand for our manufactures has in that period been checked by a tremen- 
dous political and commercial convulsion, yet on the other hand it has been increased 
during a portion of that time by an unexampled expenditure among the working classes, 
(in the form of wages to railway labourers and others,) and the supply has been checked 
oy one of the most deficient cotton crops known for many years. 

We have constructed the following tables with the greatest care, and from the uect in- 
formation we can obtain. We believe they will be found essentially correct — 

No. 20's Water twist. 

Price of cotton Cost of workman- 





per lb. 


ship and waste. 


Total cost. 


Sellin? price. 


Pro6t. 


Lost 




d. 


d. 


d. 


d. 


d. 


d. 


1845 


4-25 


3 


7-25 


9 


1-75 . 




1846 


6 


3-25 . 


9-25 


8-25 




1 


1847 


4-7 


3-1 . 


7-8 


7-8 






1848 


3-6 


3 


6-6 


6-25 




0-35 


1849 


6-25 


3-20 . 


9-45 


S-45 




1 



28 



178 



THE HARMONY OF INTERESTS. 



No. 40's Mule twist. 

Cost of workman- 
Price of cotion. ship and waste. Total cost. Selling price. Profit. Low* 



d. d. d. d. d. d. 

1845 .4-5.4 . 8-5 . 10 1-5 — 

1846 . 6 . 4-2 . 10-2 . 9-25 . — . 0-95 

1847 .5 .4-1.9-1. 8-25 . _ . 0-85 

1848 . 4 . 4.8 . 7 — . 1 
1S49 . 6-5- . 4-2 . 10-7 . 9-25 . — . 1-45 



The prices here given are those of November in each year, both in this and the sub&a 
quent tables. 

Stout Domestics. 



1845 


Price of cotton 
per lb. 

d. 

3-75 


Workmanship 
and waste. 
d. 

4 


Total cost. 
d. 

7-75 


Selling price. 
d. 

9-25 


Profit. 
d. 

1-5 


Lorn 

dm 


1846 


5-6 


4-2 . 


9-8 


9-36 




0-5 


1847 


4-25 


4 


8-25 


9-25 


1 




1848 


3-25 


3-35 . 


71 


8 


0-9 




1S49 


5-7 


4 


9-8 


8-75 




105 






Medium Domestics 








1845 


Price of cotton 
per lb. 
d, 

4-25 


Workmanship 
and waste. 
d. 

5-50 . 


Total cost. 
d. 

9-75 


Selling price, 
d. 

11-75 


Profit. 
d. 

2 


Los*. 

d. 


1846 


6 


5-75 . 


11-75 


11-25 




0-5 


1847 


4-75 


5-25 . 


10 


9-75 




025 


1848 


3-65 


5 


8-65 


9-25 


0-6 




1849 


6-45 


5-5 . 


11-75 


10 




1-75 


In estimating the secon 


d column in 


all these tables, we have 


taken into account bod 



the economy, in the cost of workmanship, where there has been any, and also the varia- 
tion in the waste owing to the varying price of cotton, which will account for the slight 
fluctuations observable. 





Price of 
cotton. 


Printing Cloths. 

Workmansh ip 
and waste. Total cost. 


Selling price. 


Profit. 


Lost 


1845 


d. 

5 


d. 

6-85 


d. 

11-85 


d. 
13 


d. 

1-15 . 


d. 


1846 


6-5 


7 


. 13-5 


13-25 




0-25 


1847 


5-5 


6-75 


. 12-25 . 


12-25 






1848 


4-5 


6-5 


. 11 


10-75 




0-25 


1849 


6-25 


6-75 


13-5 


14-25 


0-75 . 





It is important to observe that the experience of isolated individuals will not invalidate 
the conclusions of these tables, which show the margin between the raw material and 
the manufactured article at the prices of the day. These prices vary much during the year ; 
and a manufacturer who has laid in his cotton at the cheapest time, and made his con- 
tracts of sale at the dearest, may realize a profit, though the general trade incurs a loss. 
The only case in which these tables may lead to an incorrect conclusion is, where the 
relative prices in November are not fair representatives of the average prices of the year. 
In the year 1847 this was the case, the margin between cotton and yarn, or cotton and 
cloth, being much greater in November than during the chief part of the year, and the loss 
consequently far less. The average of that year left a large loss on all articles. 

From these tables it would appear — as indeed has been well known to all connected 
with the trade — that our cotton-spinners and manufacturers on an average, and with a 
few exceptions, have been carrying on their works to a loss, ever since 1845. This nas 
occurred during a period in which the price of the raw material has fluctuated upwarns 
and downwards at least 40 per cent. Now can it be supposed that they would have en- 
countered the impossibility, which it is evident they have encountered, of obtaining 
remunerating prices, if they had not produced more than our actual markets can, on an 
average of years, take oft'? 

At the beginning of this year, great expectations were entertained of our home demand. 
It was argued, and with good reason, that we never yet had a year of general empit>»- 
ment and low prices of provisions combined, which was not also a year of very iargo 
domestic consumption of manufactured fabrics. This year labour has been in very brisk 
request, and food has never been so cheap and plentiful since 1S36. Yet our expectations 



THE HARMONY OF INTERESTS. 



179 



from these facts have not been fully answered. The sellers of printing cloths and me- 
dium shirtings report that their home demand has. on the whole, been good ; the sellers 
of domestics report, on the contrary, a decidedly dull business, worse than that of last 
year ; but we believe all agree that the anticipations with which they began the year 
have by no means been realized. We suspect the cause to be this : — The depreciation 
in railway property, the effects of the Irish famine, and the commercial crash in 1847, 
have impoverished all classes of the community to a much greater extent than has been 
allowed for in the calculations of our tradesmen. We question whether " the power of 
purchase,'* on the part of the British community, is nearly equal to what it was in 1845. 
One fact alone may enable us to guess at the degree to which its aggregate means of ex- 
penditure must have been reduced. In round numbers, the sum actually expended in rail- 
ways is 210 millions: their actual value at the prices of the day does not exceed 100 
millions; and many of them pay little or no dividend. 

Let us now sum up the conclusions which our tables have solved : — ■ 

1. Our supply of cotton has materially fallen oft" during the last few years, and will not 
increase except under the stimulus of much higher prices than have (till the last few 
months) obtained. 

2. That under such ranges of prices our consumption will not maintain its present ap- 
parent rate, (or say 32,000 bales a week,) whatever be the increase or improvement of 
machinery. 

3. That, except under the stimulus of low prices, our existing markets cannot take ofl 
as much as our machinery can produce. 

4. That the practical deductions pointed to by these facts are two — -first, a permanent 
tendency towards the production of finer fabrics; and secondly, a check to the increase 
of mills and machinery — of our producing power — that is. till the increased supply of the 
raw material on the one hand, and an increased consumption of the manufactured pro- 
duct on the other, shall once more have restored the balance." 

It is here stated that the consumption of the last five years is greater by 
3600 bales per week than in the previous five, but it is not shown whence 
this cotton came. The whole quantity retained for consumption in the 
second period is less by 209,000 bales than in the first, and yet the consump- 
tion is said to have been greater by 187,000 per annum, or a total quantity 
of 935,000 bales, which added to the deficiency in the quantity retained, 
would make 1,200,000 bales. The stock of American on hand at the close 
of 1849 was less by 400,000 bales, and that of other descriptions may have 
been reduced 250,000 ; but even this leaves 550,000 'to be accounted for. 
It is scarcely possible to examine the figures given in this paper without 
arriving at the conclusion that the consumption is exaggerated. 

Admitting, however, all that is claimed, I will now proceed to show how large 
a portion of this increase has resulted from the existence of protection elsewhere. 
It has been shown* that our import of cotton goods in two years, ending June 
30, 1843, the period of almost free trade, was very small, the average having 
been but $7,184,000. If, now, to this we add the increased import of the 
year ending June, 1844, we obtain an average of about . $9,000,000 
From June, 1844, to June, 1849, the average was about . 16,000,000 
During one-half of this period the tariff of 1842 was in existence, and during 
more than half of the balance, that of 1846 was almost altogether inopera- 
tive — and for the balance of the time the duty has been thirty per cent. 
Nevertheless, the amount imported^ has been almost double, and the excess 
is not less than three-fourths of a pound per head, making an average of 
about 35,000 bales per annum. 

* Page 394, ante. 

\ By reference to the tables in Chapters II. and III. it will be seen that much of these 
imports in the last two years was obtained in exchange for certificates of debt, and there- 
fore deducted from the amount of import as there given, the object in constructing those 
tables having been that of showing what was the power of consumption resulting from the 
power of production, not that which resulted from the impoverishing system of buying goods 
on credit. 



180 THE HARMONY OF INTERESTS. 



The average import of yarn into the other protected country, the Zoll-verein, 
from 1837 to 1841, was 351.000 quintals. That of 1843 was 475,000, and 
the average from 1840 to 1844 was probably about 440,000. In 1845 it 
was 574,000. Taking that as the average from 1845 to 1849, as it appears 
to have been,* we have an excess of 134,000 cwts. of yarn, equal to 4*0,000 
bales of raw cotton. 

The two together make 75,000, which, being deducted from the excess con- 
sumption alleged to have taken place, leave 112,000, and the account will 
now stand thus . . . 1840—44 annual average 1,290,000 

1845-49 " " 1,402,000 

showing an increase of little more than eight per cent., while the low prices 
of the second period have been lower than those of the first by twenty- 
five per cent. It is obvious that the increase, trivial as it has been, 
among the unprotected consumers, has been obtained at the cost of the 
planter, and that the amount collected from the population of England 
and that of the world at large for his use, was greatly less in the second 
period than in the first. The consumption of American cotton in Great Britain, 
in the present year, is estimated at only about 1,100,000 bales, being 
little more than it was ten years since, when the average price was as 
high as at present. It is clear from this the market of England cannot be 
made to grow in such manner as to keep pace with our production. Why it 
cannot, and will not, may, I think, readily be shown by an examination of 
the operations of the past year, in which there has existed no railroad specu- 
lation, no famine, no potato-rot, and in which, on the contrary, every thing 
has tended to produce a perfect realization of the anticipations of the most 
sanguine friend of the existing system. . 

The total value of exports of the kingdom for the ten months 
ending November 5, 1849, was . . . . . . £49,400,000 

The total of grain, and flour and meal as grain, imported in 
the same period, was 10,300,000 quarters, which, at an average 
of 36s. per quarter, would amount to about £18,500,000, and 
with 43,000 tons of potatoes, to about .... 
The number of oxen, bulls, cows, sheep, &c, 144,000, say 
Of bacon, beef, pork, hams, butter, cheese,, and lard, 
1,500,000 cwts., which at 30s. would be ... 

Grand total of commodities now imported, but with 
which the people of the United Kingdom supplied 
themselves almost entirely only a few years since . £21,000,000 

Deducting these, the amount of exports remains . . 28,400,000 

The exports of cotton manufactures and yarn (£5,833,000) 
amounted to £22,550,000, and if we estimate the cotton re- 
quired for their production at three-eighths of this amount, we 
obtain as its value 8,500,000 

The wool imported to be manufactured and exported amount- 



* The export of yarn to the ports through which Germany is supplied, in four of those 
years was as follows : — 

18-45. 1846. 1847. 1848. 

Belgium, lbs. . . 3,917,000 5,359,000 3,520,000 3,168,000 
Holland « . . 21,556,000 24,662,000 16,206,000 18,877,000 
Hanse Towns, &c. . 40,315,000 45,041,000 36,123.000 32,910,000 



18,600,000 
150,000 

2,250,000 



Total lbs. 



64,788,000 75,062,000 55.849,000 54,955,000 



THE HARMONY OF INTERESTS. 181 

ed to nearly 00,000,000 of pounds, which, at a shilling a pound, 

would be 3,000,000 

The flax imported was 1,553,000 cwts., and the average 

price being 32s., the amount is . . . . . . 2,500,000 

If wc now add for the hides, timber, copper ores, Swedish 
iron, block- tin, brimstone, indigo and other dye-stuffs, silk, 
sugar, gold, silver, quicksilver, and other foreign materials 

included in this vast amount of manufactures exported only . 2,500,000 

We obtain as the total of foreign raw materials exported . £10,500,000 
leaving as the value of the products of the labour and land 

of England exported in ten months £11,900,000 

or per annum £14,280,000 

being at the rate of 9/6 = $2*28 per head, to be applied to the purchase of 
cotton, sugar, coffee, tea, silks, dying materials, timber, and all other articles 
of necessity or of luxury required for domestic consumption, grain, potatoes, 
live animals, and cured provisions alone excepted. 

If the reader will now compare this statement with those of other years 
before given,* he will, I think, have no difficulty in satisfying himself that 
" the power of purchase" of the people of Great Britain is in a state of rapid 
diminution, and that to that fact is due the distress existing among her 
people. 

It will be said, however, that she does consume much more than this 
amount. She does, and how she is enabled to do it, I propose now to show. 
Thus far, however, the accounts of the various periods are made out precisely 
alike, and answer for the purpose of comparing the present with the past. 

It will be seen that the prices of* all the articles I have particularized 
would be low even here. Of the grain, nearly three-fourths are wheat or wheat 
flour, and the price is but As. or 88 cents per bushel, delivered in England. 
The bacon, beef, pork, lard, and butter are at 6 J cents per pound, also 
delivered in England. The flax is at seven cents per pound. The wool is at 
a shilling, and the cotton supposed to be about bhd. per pound. These are 
prices at which we should not desire to deliver the same commodities at New 
York or Philadelphia, on their way to Liverpool. Nevertheless, Great Britain 
obtains all these, and immense quantities of other commodities in addi- 
tion, and yet briwjs ns largely in debt on the years business. She uses 
sugar valued at £5,000,000. Large quantities of cotton, silk, hemp, and 
hides, are consumed at home. Her consumption of tea is 40 millions of 
pounds. Of timber she consumes a million of loads, and the price of Canada 
red pine is £3 per load. How does she acquire the power to do all these 
things ? 

The cotton that comes from Bombay, as stated above, frequently yields to 
the shipper at that place but a penny per pound, which will not defray the 
cost of transportation from the place of production to the place of shipment, 
leaving nothing whatever for the cost of production, and yet the poor pro- 
ducer pays to the Company heavy taxes for the use of that land, which taxes 
are remitted to England for the payment of expenses, pensions, dividends, &c. 

The sugar from the Mauritius sells for 22s. per cwt., or 2f d. per pound, 
a price that cannot yield the shipper much, if ^iny thing, more than a penny 
per pound. The producer receives almost nothing. It was shown by the 
accounts of several large houses, owners of real estate in that island, that for 
years the estates received nothing whatever. So is it with Canada, and her 
lumber. 



* See page 57. 



182 



THE HARMONY OF INTERESTS. 



The charges upon all commodities that pass into England are immense, 
and they cannot be otherwise. The producers are few, and the consumers 
are many, and the latter must be supported by the former. Wherever four 
families must eat and but one raises food, the share that falls to the former 
must be small, and therefore it is that the farmers and planters of the world 
are kept so poor. 

With every step downward the operation of the system tends to become 
more severe. A penny taken out of a pound of cotton that sells for a shil- 
ling, is a trifle, but a penny out of 3d. falls heavily. When cotton is high, 
it sells rapidly and the charges are few. When the crop is large and it sells 
slowly, the charges are numerous. So is it with sugar, tobacco, rice, and all 
other of the products of the earth. With the diminishing power of consump- 
tion prices universally have diminished, while the necessity for advances, 
storage, &c, has increased, giving to the exchanger power to take for himself 
not only a larger proportion, but a larger quantity than before. Hence 
it is that Great Britain is enabled to consume so much while producing 
so little. 

Diminish her power of taxing the planters and farmers of the world, and 
it will speedily be seen that the power of consumption that even now exists 
results from the ability to throw upon others the burden that she should bear 
alone. The Economist, a journal not to be suspected of exaggerating the 
evils of the present state of things, expresses its belief that " the power of 
purchase" on the part of the British community is not nearly equal to what 
it was in 1845.* That such is the case there can be no doubt, and that the 



* This same journal but a fortnight before assured its readers that "ever since there had 
been a reduction of the duties of the sliding scale, and a probability that the corn laws 
would be abolished, the farmers have steadily improved their cultivation and produced 
more." If production has increased, how is it that the power of purchase has decreased? 
If the power of purchase has decreased, how are the people enabled to purchase all 
this supposed increased domestic product, and the enormous quantity that is imported? 
The power of consumption and that of production go hand in hand with each other, and 
if " the power of purchase" has diminished, as it unquestionably has, it is because the 
power of producing things with ivhich to purchase has declined. 

Much of the diminution in the " power of purchase" is ascribed to the railroad specu- 
lation, but it is difficult to see how that should have produced any such effect. Under it 
much property changed hands, but the actual expenditure was merely the cost of grading 
and laying the roads, and it cannot be doubted that the labour that has been saved by 
means of the use of the roads has been quite equal to the amount expended. The price 
paid for land, and the fees to parliamentary agents, &c, were merely transfers from the 
pocket of one man to that of another, and could not have impaired the "power of pur- 
chase." The railroad speculation produced the roads, and existing as they do, they tend 
to increase the power of production and consumption. It is necessary, therefore, to look 
elsewhere for the-causes of the state of things now existing in England. They are to be 
found in the necessity for competing with the lowest priced and most worthless labour of 
the world. The results of that necessity are exhibited in the following facts, which will 
not only account for the present diminution in "the power of purchase," but relieve us 
from difficulty in accounting for future diminutions. 

" It appears from a parliamentary return, that the holders of farms, who in 1845 were 
310,000 over the Emerald Isle, have in 1848 sunk to 108,000. Two hundred and two 
thousand cultivators of land have disappeared in three years, and with them at least half 
of fhe capital by means of which the land was made to produce any thing." — Blackwood- s 
Magazine, December, 1S49. The bank-note circulation of Ireland, which in August, 1846, 
was £7,500,000, had fallen in August, 1849, to £3,833,000. — Ibid. The poor rate of 
Ireland, which in 1846 was £200,000, has risen to £1,900,000. That of Scotland has 
risen in three years from £185,000 to £500,000. In Glasgow, anterior to 1846, it was 
£30,000. In 1848-9, it was £20( 000. The number of paupers in 1845-6, was 7,454 
In 1847-8, 51,852, Tie railroad tolls of 1845 averaged £2,640 per mile. In 1849, 
£1,1 SO.— Ibid. 



THE HARMONY OF INTERESTS. 



183 



power of purchase must continue to diminish with further diminution in the 
power of production, is quite certain. 

We Bee that, notwithstanding low prices for grain, the imports arc im- 
mense, averaging more than nine millions of our bushels per month. Will 
this continue? In answer, the domestic crop of this year has not failed, nor 
have there been any reasons why the export from the grain-producing coun- 
tries of the world should be larger than usual. We arc assured that Russia 
can supply fifty millions of quarters annually, and that much of it is now 
wasted for want of a market. She has now a market, and so lomj as a bushel 
of iv heat will yield to the producer the price of a yard of cotton cloth, he will 
accept even that rather than waste it. We are assured that he cannot afford to 
raise it at any such price, but what else can he do? Deprived of other em- 
ployment for his time, he must raise food for himself, and with the sur- 
plus purchase clothing, even if he have to starve himself to obtain the little 
that he wears. The error of English writers consists in assuming that there 
is such a thing as a necessary price. The poor labourer in India, we are 
assured by this same writer, obtains for his cotton no more than the mere rent 
of his land, leaving nothing for his labour, yet he still cultivates cotton to 
exchange for the yard of cloth with which he covers his loins. 

The people of England first inflicted upon themselves a necessity for com- 
peting with the "cheap" labour of India in the manufacture of cottons. 
That produced a necessity for competition with the " cheap" labour of Russia 
in the production of food, the consequences of which are thus described in 
the recent quarterly report of the Registrar-general: — "The population of 
England has suffered, died, and decreased, during the <ju<irt< r, to a dcyree of 
which there is no example in the present century." Emigration has gone on 
so rapidly, and so much in advance of immigration, that u England has now 
less inhabitants by several thousand than were within her shores at mid- 
summer." 

The system tends to increase man's necessities and to diminish his power. It 
is here shown how enormous was the difference in the prices of cotton in the two 
periods, and we may now look to see whether the price of cloth and iron changed 
therewith. From 1840 to 1844, the average price of a piece of gray cotton 
cloth was 6& 7d. ) from 1845 to 1849, it was above 6s. Hero is a reduction of 
ten per cent, to set off against changes of 40 per cent. The average price of 
iron in 1845, 184G, and 1847, was 50 per cent, higher than that of the 
four previous years ; and thus, while the cotton was lower than before, the 
thing which, of all others, the producer of cotton desires to use, was vastly 
higher. He was steadily giving more and receiving less, and it is no matter 
of surprise that his power of production diminished and his condition steadily 
deteriorated. 

To this it is due that the power to pay for cotton cloth on the part of the 
people subjected to the system is steadily diminishing, and that " the con- 
sumption cannot be maintained ." Nothing, " we are assured, but the stimu- 
lus of low prices" will enable " the existing markets" to take off the pro- 
duce of the machinery of England ; and, to secure a* supply at low prices, 
every English writer on the subject is looking for what is called " cheap la- 
bour." That of the Zooloos may be had at 10s. per month, and Natal is 
advantageously situated for maintaining " competition with the States." 

The "practical deduction pointed to by these facts," and that which most 
interests the planter, is that there must be " a check to the increase of mills 
and machinery," until " the increased supply of the raw material" shall 
bring down the price of cotton to the level of the powers of the consumers, 
or until " the power of purchase" shall rise to a level with the existing prices. 
That the latter, among the unprotected communities of the world, has 



184 



THE HARMONY OF INTERESTS. 



steadily declined, during a long series of years, is obvious, and there exits -a 
no reason for supposing that the future will be different from the past. The 
only remaining mode of " restoring the balance" is that of reducing cotton 
to the level of a constantly diminishing u power of purchase." 

That it will be so diminished, unless the planters can determine to help 
themselves, there can be no doubt. The men who have heretofore raised 
sugar and coffee are now about to turn their attention to cotton, as likely 
to be more profitable than either. The people of Jamaica have been forced 
to abandon coffee, and sugar cannot, as their journals inform us, be any longer 
profitably cultivated. Why it cannot, the Economist informs us. 

The same number, from which the above long extract is made, informs us 
that the sugar market is " drooping," the " expectation of a large additional 
consumption not having been realized." The consequence is seen in the fact, 
that the sugar of the distant Isle of France is quoted at 22s. hd. per cwt., 
being two and two-fifth pence per pound, yielding to the shipper, after pay- 
ing freight and charges, about as much as the cotton above stated to have 
been shipped from Bombay, to wit, one penny, and to the producer, on his 
plantation, but little more than is necessary to pay his rent. Under such 
circumstances, the labour of the people of the Mauritius becomes " cheaper," 
and may ultimately become as " cheap" as that of the Zooloos. 

Thus is it everywhere. The late cotton planter of Alabama is trying 
sugar, and the sugar planter of Jamaica is determined to try cotton, under 
an impression that " a sufficient supply is not yet raised to meet the demand 
which exists for the article." The real cause of difficulty is, that the cotton 
planter and his neighbours are unable to obtain one-third as much sugar as 
they would desire to consume, and the sugar planter is unable to obtain one- 
third as much cloth as he would desire to consume, because the cost of both in 
labour is so greatly enhanced by the necessity for making their exchanges in 
the distant market of England. Were both determined to make a market 
on the land for the products of the land, each would obtain in return for the 
same quantity of labour thrice as much as now ; whereas, if they continue 
to maintain the monopoly system of England, they must obtain even less 
than now, little as it is. Among the planters of the world, there is perfect 
harmony of interests, and those of all are to be promoted by the adoption of 
a system that shall tend to raise the value of labour, thereby enabling the 
man of Ireland, who now consumes one pound of cotton, to become the man 
of America, consuming a dozen or twenty pounds. 

The object of every effort at maintaining in existence this great monopoly 
of machinery is that of preventing increase in the value of labour and land 
throughout the world, that commodities may be had "cheap." How great is 
the power exercised for this purpose, will readily be seen by all who study 
the sliding-scale system, by which consumption is diminished with any small 
advance of price, and the tendency upwards thus counteracted. The existing 
consumption can be maintained only at the present minimum prices, and the 
reason why it can only be so maintained is, that "cheap" cotton- and "cheap" 
s sugar make the laboiw-cost of cloth and iron so great that the poor culti- 
vator of those " cheap" things cannot afford to purchase either. Dear as is the 
cloth to the consumers, and little as the cotton has yielded to its producers, the 
manufacturers have, we are assured, been working at a loss during nearly 
ail those five years, and the profits are set down at only lid. per pound 
in 1845, designated by Messrs. Ilathbone, in their circular accompanying the 
diagram given at page 75, as one of " enormous profits to manufacturers." 
The differences in the prices of both cotton and yarn as here given, from 
those given by Messrs. R., are sometimes remarkable. The cost of converting 
a pound of cotton into yarn No. 40, is also remarkable, and must embrace 



THE HARMOXY OF INTERESTS. 



185 



many allowances for wear and tear, management, &c. xV mill in this neigh- 
bourhood, at work upon No. 35, converts into cloth above a million of pounds, 
with the labour of 800 persons. The average wages of England arc under 
30/. per head, and this would give 9000/., or about two millions of pence, 
for wages of labour required for converting a million of pounds into cloth, or 
two pence per pound. Notwithstanding this unceasing succession of losses, 
there has been, as we are assured, a constant increase of machinery for doing 
the work, while the whole increase of consumption is trifling. It is diilicult 
to reconcile these statements. 

Less difficult is it to ascertain what is the policy of the planter. It is to 
break down the monopoly and bring the machinery of England to the cotton 
fields } and there it will come whenever the producers of food and cotton shail 
declare to the world that it is their fixed policy to extend the consumption &f 
cotton by enabling themselves to supply it cheaply to the consumers, a work that 
is to be accomplished by freeing themselves from the control of those who 
now live, and move, and have their being, by means of standing between 
the producer and the consumer, impoverishing the one so that he cannot con- 
tinue to produce, and the other so that he cannot continue to consume. 

It cannot fail to strike the reader as singular, that the clever writer of this 
article supposes that the system which destroys cultivation in India and Bra- 
zil has no such effect in this country. He assumes that we produce all we 
can, whereas we know that the great object throughout the South is to limit 
production, and that the producers are perpetually flying from lands that have 
boon exhausted to seek new ones to be again exhausted, and wasting on the 
road more labour than would add to the crop hundreds of thousands of bales. 

Had the planters eight years since determined that the loom should come 
to the cotton, the crop of this year would exceed three millions, and the price 
would be higher than it is now with one of two millions ; for we should our- 
selves be consuming much more than a million, the purchasers of which would 
be found among prosperous makers of iron, who would be producing 1200 or 
1500 thousand tons to be applied to the making of roads for the use of pros- 
perous fanners and equally prosperous miners and manufacturers. Increase 
of price thus produced increases consumption, and such is the tendency of 
protectioni Increase of price resulting from short crops tends to diminish con- 
sumption, and such is the tendency of the monopoly system. It destroys both 
the power to produce and the power to consume. 

CHAPTER SEVENTEENTH. 

ROW PROTECTION AFFECTS THE CURRENCY. 

If protection be "a war upon labour and capital," it must tend to produce 
those disturbances of the currency that tend so greatly to dimiuish the return 
to both. If, on the contrary, it be a peaceful measure of resistance to a sys- 
tem tending to the oppression of the labourers and capitalists of the world, 
then it must tend to produce that steadiness of the currency so desirable to 
all, labourer aud mechanic, farmer and planter, ship-owner and merchant. 

The real currency of the world consists of labour and the things for which 
men are willing to give labour, food, clothing, fuel, iron, &c. That which is 
usually denominated " currency/' is merely the standard by which their re- 
spective values are measured. The labourer sells the exertions of a week for 
five dollars, and he receives in return five bushels of wheat, also valued at 
five dollars. The capitalist sells a house for twenty thousand dollars, and 
orders the purchase of a quantity of shares of stock which, measured by the 
same standard, are found to be the equivalent of that number of dollars. 

The price of wheat changes with the size of the crop. So does that of 

24 



186 



THE HARMONY OF INTERESTS. 



sugar. If the supply of wheat be large, and that of sugar small, much wheat 
will be given for little sugar. 

The introduction of a third commodity, itself liable to variation in the 
supply, as is the case with money, tends to produce additional variations in 
the quantity of one commodity that must be given for another. Thus, if the 
supply of money be large among one set of wheat raisers, and small among 
another, the raiser of sugar will sell in the first and buy in the last, obtaining 
much money from the one and giving little to the other. 

Were all arrangements for the production, purchase, or sale of commodities 
or property executed on the instant, this cause of disturbance would scarcely 
exist, because the prices of all would be similarly affected, being high when 
money was plenty, and low when it was scarce, and the quantity of sugar to 
be given for wheat, or wheat for sugar, would depend upon the size of the 
crops almost as completely as if no intermediate commodity were used. 
Such, however, is not the case. The merchant buys coffee in January, and 
contracts to deliver its equivalent in money in July, at which time money 
may be so scarce that six pounds of coffee will command no more than would 
have been done in January by four pounds. The merchant commences to 
build a ship in July, when money is scarce and the price of labour is low, 
and he finishes it when money is plenty and wages are high, and it costs him 
ten, fifteen, or twenty per cent, more than he had calculated upon. The 
little trader, on the contrary, who buys and sells from day to day, loses 
nothing. If he buys high he sells high, and if prices are low to buy, he 
makes them low to sell, and the measure of his business is the measure of his 
profits. 

The great sufferers by such variations are those the nature of whose pro- 
perty, or the character of whose business, requires them to make arrange- 
ments far ahead, and to take the risks incident to changes in the currency 
for the whole period that elapses between the commencement and the con- 
clusion of an undertaking. Such are all the persons the products of whose 
labour are not intended for immediate consumption— the owners of houses, 
farms, factories, furnaces, railroads — all, in fact, connected with the improve- 
ment of land. In a time of pressure for money in one place, flour, cotton, 
eloth, and other articles intended for daily consumption, may be transferred to 
other places where money is plenty, and the changes in their prices are there- 
fore small when compared with those which are experienced by the possessors 
of property that cannot be transferred, and is therefore obliged to bear the 
whole burden of the change. In such cases land becomes entirely unsaleable 
except at an enormous reduction of price, to which its owners must submit if 
they are placed in a position to render sales necessary, and thus it is that so 
many persons connected with land and its improvement are ruined by revul- 
sions that affect but in a slight degree the operations of the retail grocer. 

Such, likewise, is the case with labour. The man who has a family and 
finds no demand for his labour cannot change his locality. He and his 
family must suffer together. Food may be at a low money-price, but if he 
can obtain no employment, the labour-price is so high that he cannot pur- 
chase it. Land and labour, then, are specially interested in the maintenance 
of uniformity in the standard by which the products of both are measured, 
because they are the great sufferers by the changes which occur in the pro- 
gress of time. 

Time and distance are, in this respect, the equivalents of each other. The 
man who builds a house calculates upon the continuance, during the period 
of its erection, of the state of things that existed at its commencement, and 
he who remits to China to purchase teas, bases his calculations on the state 
of affairs that existed b that country three months previously. If money in 



THE HARMONY OF INTERESTS. 



187 



the mean time has become more abundant, he may pay higher for his teas 
than he had calculated upon, and if before their arrival it becomes less 
abundant here, he will obtain less, and thus will reap loss instead of profit. 
The man who raises cotton when he might have raised sugar or wheat, bases 
his calculations on the state of affairs that he supposes will exist in a foreign 
country, and is thus forced to superadd the risks of distance to those of time. 
If he exchanged his products with his neighbour, both would be subject to 
the same variations, so far as the currency was concerned. If money were 
less abundant, flour, sugar, pork, cloth, and iron would feel its effects pre- 
cisely as cotton felt them, and though he might obtain less money, he would 
have precisely the same quantity of the commodities for the purchase of 
which he required to have money. The proximity of the consumer and the 
producer tends, then, to lessen the difficulties resulting from changes in the 
currency by which land and labour are always the chief sufferers. 

The object of the colonial system was that of compelling the farmers and 
planters of the world to make their exchanges in a distant market, and thus 
to increase the time within which such risk must be borne, adding (hereto all those 
which result from distance. When the Hindoo exchanged his cotton on the 
spot for cloth, the prices of cotton, cloth, and labour were governed, by the 
same circumstances, for the exchanges were made on the instant. To make 
his exchanges now, two years' time are required, and he is, during all that 
period, subject to the risk of changes like those which have marked the years 
1847 and 1848. His pursuit is rendered one of mere gambling, without the 
advantage of holding his own cards, although bound to pay the losses. 

All the losses he and his fellow-planters do pay, as will be seen by those 
who will study out the working of the system. The cotton, the wool, the 
sugar, and the food of the world are sent to England for exchange. Her 
people buy and sell on the instant, the time that is required to elapse between 
the purchase of the wool and the sale of the yarn not exceeding a single week. 
If yarn fall, so does cotton. If cotton rise, so does yarn. The whole loss 
from changes of currency resulting from time and distance is thus thrown 
upon the planter. The whole gain resulting from the diminution of the risks 
of both goes to the proprietor of the small and easily transported spindle, the 
cost of which is as nothing when compared with the cost of the great machine 
required for producing the wool. 

The nation that thus desires to compel all the other nations of the world 
to bring to her their products, that they may there be measured by 
her standard, ought to be able to show that it is one the length, or the 
contents, of which must, under any and every circumstance, remain un- 
changed. The standard of weight and that of length are fixed and unchange- 
able. So should be that of value. Far, otherwise, however, is it. The con- 
trol of that great and important standard for the measurement of the values 
of the world is placed in the hands of the bank of England, the directors of 
which have proved their utter incompetency for the important business dele- 
gated to them by bringing the institution, at four different periods within 
the last thirty years, within the jaws of bankruptcy. Their object is to 
make large dividends, and, to accomplish that object, money is, as it is called, 
made plenty ; that is, the directors overtrade largely, and thus block up the 
capital of individuals who find themselves compelled to take from the bank 
evidences of debt (certificates of deposit) not bearing interest, when they 
would have preferred other evidences bearing interest, and would have ob- 
tained them at reasonable prices had not the bank commenced to overtrade. 
"With every increase of this indebtedness, called deposits, the bank considers 
itself richer and overtrades further, until at length speculation is produced, 
railroads are made, ships and houses are built, and then the day of settlement 



188 



THE HARMONY OF INTERESTS. 



arrives, when the bank crushes everybody in the effort to save itself. Tlie 
standard of value shrinks to half, and the owner of fixed property finds him- 
self ruined, while the planter obtains threepence where he had looked, for 
sixpence, and the farmer is brought in debt for charges on his food where he 
had looked to realize a dollar a bushel. 

The man of England, who buys cotton and sells yarn or cloth, suffers lit- 
tle from those changes. On the appearance of the first sign of change, he 
shortens his hours of work, or diminishes the number of his hands, and then, when 
the time for it arrives, he closes his mill. His work-people are thus, in whole 
or in part, deprived of wages, and rendered unable to purchase food or cloth- 
ing, the consequence of which is diminished demand and reduced prices for 
both, and thus are all the losses thrown upon the farmers and planters of the 
world, who are ruined by the necessity for dependence on a country which 
desires to establish for itself a monopoly of machinery for the supply of iron 
and for the conversion of wool into cloth, with all of which they might supply 
themselves at less cost than is now imposed upon them in each and every year. 



It is usual to attribute the disasters of the period from 1836 to 1842 to 
derangements in our currency, proceeding from erroneous action at home ; but 
those who examine more carefully will find that they were themselves effects 
resulting from other causes, as I propose now to show. 

It is usual to talk of capital as money ; but money is only the standard by 
which commodities are measured, and a very small quantity of the one suffices 
to measure a large quantity of the other. The same dollar may be used a 
thousand times in a week, each time acting as the standard by which labour, 
flour, cotton, sugar, &c, have been measured. The man who has sold a cargo 
of sugar has acquired a credit with somebody by aid of which he may obtain 
a cargo of flour. The borrower from a bank has acquired a credit which he 
transfers to his neighbour, and that neighbour transfers it to a third, who 
divides it among his workmen, and by its aid they obtain food, clothing, and 
shelter. 

Whenever the daily demand for labour and its products is equal to the daily 
supply, the rate of interest, or the price of capital seeking investment, will remain 
stationary, to the great advantage of the owners of landed and other fixed capi- 
tal. Whenever, by reason of any cause whatever, the daily demand is less 
than the daily supply, the accumulation of unemployed cajDital begins. There 
are fewer houses built, and the consequence is, that there is less demand for 
labour, the price of which falls, and the power to consume food and clothing 
is diminished. The demand for iron and cotton is lessened, and furnaces and 
mills cease to be built, and the power to consume food and clothing is thus 
still further diminished. With each step in this progress, there is a tendency 
to the accumulation of unproductive capital. One man has it in the -form of 
iron, another in that of cloth, a third in that of labour, and a fourth has it 
in the form of a debt due to him by a bank which pays him no interest. By 
degrees the iron and cloth pass off to be consumed, and, as their owners do 
not desire to reinvest the proceeds, they take a further credit on the bank, 
which still pays no interest. In this manner capital is blocked up, deposits 
accumulate, the rate of interest necessarily falls, and the prices of existing 
securities rise. 

With this rise comes a desire to create more investments similar to those 
which still continue to pay interest, and there is a rush to seize on those sup- 
posed to possess greater advantages than others. Speculation begins, and 
prices run up rapidly. Having reached the zenith, the downward course be- 
gins. Thenceforward the progress is rapid, and fortunes disappear in a mo- 



THE HARMONY OF INTERESTS. 



189 



ment, leaving not even " a wreck behind." The capitalist, after having been 
for a long time deprived of interest, now loses the capital itself. 

By the laws of 1832 and 1833, railroad iron, French merchandise gene- 
rally, linens, and other commodities, were freed from duty. Some descrip- 
tions of woollen manufactures were reduced to ten per cent., and a general 
reduction was established, commencing in 1833, and increasing biennially 
thereafter, until there should be reached a uniform rate of 20 per cent. 

The passage of these laws diminished the demand for capital to be employed 
in the making of iron. As they came gradually into action, there was a dimi- 
nution in the tendency to build mills. In place of producing iron and cloth, 
we bought them on credit. Capital accumulated, and the prices of dividend- 
paying stocks rose. Next, companies were established for making railroads, 
and States made roads and canals, for which the iron and cloth were bought 
on credit. The difficulty of employing capital in the East caused it to seek 
investment in the South and South-west, there to be employed in the making 
of banks and roads, and there to be sunk for ever. The day of payment 
came. The iron and cloth had been used, and the certificates of debt given 
in exchange for it were abroad. The banks were heavily in debt to the per- 
sons whose capital had accumulated in their hands, and not being able to pay 
they had to stop, and thus commenced a period the most disastrous to the 
labourers and the owners of capital fixed in land, houses, and roads, that the 
country has ever seen. 

An examination of the tables I have furnished will show that, during this 
period, the productive power of the country was stationary. Capital was in 
demand for distant speculation, but for little else. Houses, ships, factories, 
mills, furnaces, and all other of the modes of investment by which value is 
given to land, felt the effect equally, and thus, while the labourer suffered in 
the diminution of wages, the land-holder suffered in the diminished value of 
land. Had the roads and canals of 1835 to 1839 been based upon home- 
made cloth and iron, they would have produced unmixed good ; but being made 
with borroiced cloth and bor voiced iron, they were accompanied by a general 
deterioration of condition throughout the community, resulting in the disgrace 
of bankruptcy and repudiation. 

By those who will trouble themselves to look below the surface, it will 
readily be seen that the state of things here described is precisely that now 
existing, and that the process at present going on is the same that brought ruin 
eight years since. Companies obtain large quantities of English iron upon 
securities that would not be received in this country, and when the day of 
defalcation shall come, as come it must, the cry of x\merican bankruptcy will 
be as rife throughout Europe as it was but five years since. Scarcely a week 
elapses that does not bring with it a notice like the following, and yet the 
quantity of iron consumed is less than when it was produced at liome, and 
paid for in labour that is now being wasted. 

' : The agent who went to England, to purchase iron for the Great-Western Railroad of 
Illinois, has returned in the Cambria, with proposals to furnish the whole quantity 
required for the road from Cairo to Chicago, receiving in payment the six per cent, ster- 
ling bonds of the Company, payable in London/' 

Capital is said to be abundant, and interest is low — for Chose who have 
unquestionable securities. The reason is, that the natural outlets for capital 
are closed.* Iron is superabundant, and furnaces are not built. Coal is 
superabundant, and mines are not opened. Cotton cloth is superabundant, 
and mills are not built. Ships are superabundant, and the building of ships, 

* It would be nearly impossible to find a mode of investment tending to produce de- 
mand for labour, in which capital could be profitably employed, and hence it is that there 
is so universal a demand for bank charters. 



190 



THE HARMONY OF INTERESTS. 



brigs, and schooners, is diminished. We are buying on credit the cloth and 
iron we should be making, while ,the labour and capital that should be em- 
ployed in their production seek in vain for employment. The heavy sufferers 
are, and are to be, labour and land. The broker takes his usual shave 
for the notes which pass through his hands, and the grocer charges his usual 
cent per pound on sugar, but the furnace is closed, and with it the demand 
for food and labour — the mine is abandoned, and the miner suffers from want 
of clothing — the constructor of railroads obtains no dividend, and the desire 
to make roads as an investment of capital has passed away, and with it the 
demand for labour, food, and clothing. By degrees, the same results must 
be experienced by every interest of the nation. The return to labour is 
diminishing, and the value of land, houses, ships, railroads, and every other 
species of property, is dependent on the extent of that return — rising as it 
rises, and falling as it falls. 

The nearer the consumer and the producer can be brought to each other, 
the more perfectly will be the adjustment of production and consumption, 
the more steady will be the currency, and the higher will be the value of 
land and labour. The object of protection is to accomplish all these objects, 
by bringing the loom and the anvil to take their natural places by the side 
of the plough and the harrow, thus making a market on the land for the pro- 
ducts of the land. 



Of all the commodities in use by man, there are none that contribute so 
little to his comfort or convenience as gold and silver. They are useless for 
the clearing or draining of lands, the building of houses oi» mills, or the con- 
struction of ships or railroads. They can be neither eaten, drunken, nor to 
any extent worn. Nevertheless, of all they are the two whose arrival and 
departure are most carefully chronicled. 

Ten furnaces and rolling-mills, capable of producing in a year three mil- 
lions of dollars' worth of iron, may close without producing even a passing 
remark from a newspaper, but no vessel can arrive or depart, with fifty 
thousand dollars in gold, without the arrival being noticed in half the papers 
of the Union. 

The factitious importance thus given to the precious metals is one of the 
effects of the colonial system, which demands that all the commodities of the 
world shall be brought to one market, there to be submitted to one standard. 
Its effects at home have been to make every man a seller of almost all he 
produces, and a buyer of almost all he consumes.* "In our social system/* 
says the accomplished traveller, Mr. Laing,f "every man buys all he sells, 
and sells all he produces. The very bread of our labourers/' he continues, 
"is often bought at the manufacturer's shop." The system has converted a 
large portion of the little occupants into hired labourers, receiving from six to 
nine shillings a week,J and occupying poor houses in poor villages, where 



* ; ' The evil of our economical system is, that too many of us live by wages. When 
masters suffer, the servant starves. When wages stop, he has nothing to fall back upon. 
When he would eat, he has every thing to buy — and, wages stopped, where has he to 
buy with? But the seed-time and harvest of the spade husbandman never fail him. He 
may lose a crop, but something is still left. When the slug takes his patch of wheat, he 
can kill him, or thrust in cabbages, or barley, or vetches, or something. The cow will 
yield her milk, whether ports are open, or discounts are raised. Take labour out of the 
market, and wages rise — the great body of consumers possess better means of payment, 
and manufacturers and tradesmen flourish by cheap food and better wages. The farmer 
is relieved in his rates, and the landlord gets a better rent for his land." — The Mother 
Country, by Sidney Smith. 

. -j- Notes of a Traveller, page 152, American edition. $ See pages 113 — 117, ante, 



THE HARMONY OF INTERESTS. 



191 



they are compelled to waste much of the time that would, under a different 
one, be employed with infinite advantage to themselves and others.* 

The man who exchanges directly with his neighbour food and labour for 
coal or iron, has little need of money. He exchanges labour for labour, and 
if the account do not adjust itself, it is frequently balanced by the transfer of 
the difference to the credit of another, and thus is there established in every 
community in which men combine their exertions, a sort of clearing house, 
quite as effective in its operations as the celebrated one of London.")" 

The man who sends his cotton to Liverpool or Lowell, trades altogether 
for money. He desires to know how much gold he can have for a bale, and 
how much iron he can have for a pound of gold. He uses machinery with 
which the others can dispense. 

Whatever tends to increase the quantity of machinery required for the 
accomplishment of a given effect, tends to increase the friction and augment 
the power required for its accomplishment. Such is the case here. The 
necessity for using gold tends to introduce a new and powerful cause of dis- 
turbance in the operations of the planter, and greatly to augment the cost of 
them, thus increasing the friction and diminishing the effect. Gold and 
silver are reduced in weight by abrasion, and fo¥ all this loss the producer and 
the consumer pay. The exchanger pays nothing. He lives at their cost. 

Twenty-five years since, we thought much of gold or silver, for we were 

* "One principal cause of the extraordinary productiveness of land, under the 
management of small occupiers, is, that all or most of the cultivators are directly inte- 
rested in the success of their labour; they work for themselves, and consequently with 
an ardour which cannot be expected from hired labourers. Every farmer might, how- 
ever, make his servants almost equally zealous in his cause by altering the mode of re- 
munerating them. If, instead of being paid a fixed rate of wages, they were entitled to 
a certain proportion of the crops, they would strive to make the crops as abundant as 
possible. * * * Nothing more is wanting to cure over-population than to make people 
comfortable, and to make the continuance of their comforts dependent on themselves." — 
Thornton on Over-population. 

f Such are "the protective societies"' established in New England, in which workmen 
supply themselves with the various commodities required for their consumption. They 
desire to dispense as much as possible with the services of the exchanger, as common 
sense would teach all men to do. I take the following paragraph, illustrative of this 
movement, from one of the journals of the day : — 

"Mr. Kaulback, the purchasing agent of the several protective unions in NewEnglanrl, 
has paid for the purchase of goods for the quarter ending January 1, 1850, the sum of 
$102,000, being an increase of some §23,000 over the previous three months. This is an 
important branch of trade that has recently grown up among us. the more so as it is a 
cash business, no credit in any case ever being asked for. There are now in active 
operation 109 union cash stores in New England, nearly all stocked by the above-named 
agent.'' — Boston paper. 

One of the most remarkable cases of combination of action is now going the rounds of 
the newspapers. Captain Geo. Kimball determined to build a ship in a remote district 
of Maine, and there, "alone, a company of one, without capital, in a forest, at a distance 
even from deep water, he commenced his noble enterprise. He was soon joined by a 
single man, in a few weeks others followed ; women contributed provisions, and the 
farmers sent in cattle which were exchanged for materials for ship-building. The no- 
velty of the undertaking attracted adventurers from a distance, and experienced ship- 
builders and joiners arrived to give their strength and skill to the work. All who aided 
in the enterprise, whether men, women, or children, received their proportionate share 
in the ship. In April last the work was commenced, and in November she was launched, 
a splendid ship of more than six hundred tons burden, and christened the ' California 
Packet.' She is now in Boston with her passengers on board, those who built and own 
her, and to whom she is now a home. We need not say that the men and women who 
compose this company are specimens of our New England population, to whom we can 
refer with pride.'' — Boston Transcript. 



192 



THE HARMONY OF INTERESTS. 



then obliged to export them. Under the tariff of 1828, we imported them, 
and then they were little the subjects of thought. Under the Compromise, 
there came a demand for so much coin that we became bankrupt, and then 
came a rage for gold. Under the tariff of 1842, we imported much gold, 
and the idea ceased to occupy the public mind. Under the tariff of 184G, 
we have exported much, and have run largely in debt, preparatory to a de- 
mand for gold. When that shall come, it will again be sought for as it was 
in 1842. 

Among the evidences of the wastefulness of the existing system may be 
found the rage for increasing the number of places at which gold is to be 
weighed and marked — called mints. The mint neither adds to the quantity 
nor improves the quality of the thing that is minted, and yet it is now pro- 
posed to spend six or eight hundred thousand dollars in making an addition 
to the number of buildings in which this work is to be performed, although 
there are now far more than are needed for the work that is to be done. 
The object in view is the saving of freight and interest. Were the govern- 
ment to receive bullion in New York, paying for it at full price, and then to 
transport it at its own cost back and forth, the freight and interest would not 
amount to half as much as the salaries of the officers, and were the same 
capital applied to the building of furnaces, it would erect as many as would 
produce as much iron as would pay for more than half the gold and silver 
coined in the year 1848, the amount of which was $4,450,000. It is time 
that the planters and farmers of the Union should look to these matters for 
themselves, for they it is that have to suffer by the waste of capital. 

Striking evidence of the diminishing power of the people of Great Britain 
and Ireland to obtain the comforts and conveniences of life, may be found in 
the following statement of the quantity of gold and silver plate, including, of 
course, spoons., forks, and other articles of daily use, stamped at the follow- 
ing periods : 



1 SOI— 10 
1810— 29 
1839—47 



17,000,000 
2 1 ,000,000 
28,000,000 



Gold-plate ounces. 

5,471 
(5,926 
7,011 



Silver-plate ounces. 

1,015,147 
1,209,616 
1,118,550 



Value of bullion per head, 

65 cents. 
4-45 u 



The last thirty years have witnessed the passage of a series of laws tend- 
ing to compel the people to use more gold and silver ; yet, with the exten- 
sion of the system, their ability to be customers to the men who mine 
those metals has declined almost one-third. The market of the miner is di- 
minishing as well as that of the planter. 

With the diminution of the necessities of man there is a constant increase 
of his powers. The furnace and the mill diminish his necessity for going to 
the distant market, while giving him roads by which to seek it at his pleasure. 
The ship brings immigrants to eat the food and wear the cotton, and the 
freight received from them tends largely to diminish the cost of sending food 
and cotton to distant lands. So is it with gold. The nearer the consumer 
and producer can be brought together, the less is the necessity for it, and the 
greater the poiuer of obtaining it. The tendency of the tariff of 1846 is to 
increase the necessity for it and diminish the power of obtaining it, because it 
tends to diminish the value of both land and labour. 



THE HARMONY OF INTERESTS. 



193 



CHAPTER EIGHTEENTH. 
HOW PROTECTION AFFECTS THE FRIENDS OF PEACE. 

The more spades and ploughs employed, the larger is the return to labour. 
The more perfectly peace is maintained, the greater is the number of persons 
who may employ themselves with spades and ploughs, the more rapid must 
be the increase of production and the larger must be the reward of the 
labourer and the capitalist. 

The more swords and muskets employed, the smaller must be the return to 
labour. The more wars are made, the greater must be the number of persons 
employing swords and muskets, the slower must be the increase of produc- 
tion, and the smaller must be the reward of the labourer and the capitalist. 

Protection is said to be a " war upon labour and capital." If it be so, it 
must tend to promote war. We are urged to adopt measures for maintaining the 
monopoly system of England, and are assured that, by doing so, we shall contri- 
bute to the establishment of peace. To prove that such would be the effect, 
it would be necessary to show that the colonial system had heretofore tended 
to the accomplishment of that great end. 

If, however, we examine what has been the cause of most of the wars of 
the last hundred and fifty years, we shall find that it has been the desire for 
the possession of colonies whose people could be made " customers," and 
thus taxed for the support of the country that ruled over them. France had 
Canada, and she desired the country west of the Mississippi ; she had islands in 
the West Indies, and she wanted more. England had some and wanted more. 
France and England were both in India, and, to settle the question which should 
tax the whole, that country was desolated by the march of contending armies 
during a long series of years. France had colonies to lose, and hence the war of 
1793. France wanted colonies in the Mediterranean, and hence the rupture 
of the peace of Amiens, and the series of wars that closed with Waterloo. 
Since that time we have had a succession of wars in India for the extension 
of British power over Ceylon, Siam, Affghanistan, Scinde, and the Punjaub. 
The chief object of the war with China was that of compelling her to open 
her ports to foreign commerce, and it was accounted a righteous enterprise 
thus to compel the poor Chinese to open their eyes to the blessings of free 
trade. At the Cape, the war with the Caffres has cost millions. France, 
not to be outdone, seized on Tahiti, and deposed its poor queen; and at 
this moment makes war on the poor Sandwich Islanders, because they will 
not permit her to do with brandy as England in China did with opium. One 
portion of the English nation sells ponder to the people of Africa, to enable 
them to carry on wars in which they make prisoners, who are sold as slaves, 
while another portion watches the coast to see that the slaves shall not be 
transferred to Cuba or Brazil. The anxiety for colonies has caused the waste 
of hundreds of thousands of lives, and hundreds of millions on the worthless 
Algeria. Thus everywhere it is the same ; everywhere the anxiety for trade 
is seen stimulating nations to measures tending to the impoverishment and 
destruction of their fellow-men. 

The power to make war depends upon the high or low valuation of man. 
Russia makes war readily, because men are cheap. France supports large 
armies at small cost. The East India Company's army consists of many 
hundred thousand men. Men in India are cheap. Belgium supports but a 
small army, because men are more valuable. England is weighed down by 
her fleets and armies, because wages are higher than on the continent, and 
she is therefore compelled to depend on voluntary enlistment. Could the 
price of men be raised, she would be compelled to dispense with fleets and 

25 



194 



THE HARMONY OF INTERESTS. 



armies, and the necessity for colonies would cease to exist. Throughout the 
world, armies have been large where men were held of small account, and 
throughout they have tended to become less valuable as armies became more 
numerous. 

The cause of war is to be found in the diminished or diminishing produc- 
tiveness of labour, as our own experience shows. The increasing difficulty 
of obtaining the means of support, from 1835 to 1842, produced the dispersion 
of men that led to the war in Florida, the occupation of Texas and Oregon, the 
difficulty with Great Britain, the war with Mexico, and the occupation of 
California; and this latter is now leading us into discussions with Great Britain 
about the rights of the Mosquito king, which, but for the dispersion to Cali- 
fornia, would interest us little more than would those of the King of Bantam. 
The colonial system is with us, as with all, the avenue to war, because it 
tends to diminish the value of labour and land. 

When we look to the internal condition of those nations that, from an anx- 
iety for "ships, colonies, and commerce," have been always engaged in wars, 
we find it a scene of universal discord. Louis Philippe maintained fleets 
and armies, engaged at one time in the subjugation of Algeria, and at others 
in the seizure of Tahiti, and in similar enterprises elsewhere. The unpro- 
ductive class increased in numbers, and the burden to be borne by the pro- 
ductive class increased in weight until the explosion of 1848, followed by 
barricades of towns, and by a series of disturbances producing a necessity 
for increasing still further the number of unproductive consumers, men car- 
rying muskets, required to secure the maintenance of internal peace. Eng- 
land maintains large fleets and armies for the protection of commerce and 
colonies, and her whole empire is " a scene of rude commotion." At home, 
we see her chartists attempting revolution ; in Ireland, monster meetings 
and efforts at separation, followed by appeals to arms ; in Canada, efforts at 
revolution, followed by the present determination to effect peaceable separa- 
tion ; in the West Indies, universal discord among the employers and the 
employed; in India, perpetual difficulties, and everywhere a necessity for 
maintaining large armies for the purpose of maintaining internal peace, or, in 
other words, for preventing those who have property from being plundered by 
those who have it not, and enabling those who are strong to tax those who 
are weak. 

With the gradual diminution in the productive power of the people of 
England, we see an increase of discord between the employers and the em- 
ployed ; strikes becoming more numerous, and accompanied by more serious 
results, the destruction of buildings and machinery being added to the injury 
resulting from long suspensions of labour. In Scotland, the population of 
whole districts is expelled to make way for sheep, while other districts pre- 
sent to view outrages similar to those exhibited in the lands further South. 
In Ireland, we see a scene of almost universal war, the land-holder in one 
place expelling his tenants and destroying their houses, while in thousands 
of others tenants are seen carrying off and secreting their crops, to avoid the 
payment of rent. 

If we look at home, we see similar events resulting from every attempt to 
throw down the barrier of protection and assimilate our system to that which 
has produced the ruin of the British colonies. At no period of our history 
has there prevailed such universal discord among employers and employed 
as during the last few years of the Compromise act. The productiveness of 
labour was, as we have seen, gradually diminishing, and the employers were 
unable to pay to the employed such wages as would enable tbem to obtain 
the same amount of conveniences and comforts as they had before enjoyed. 
The year that has now closed has been signalized by the same state of things 



THE HARMONY OF INTERESTS. 



195 



throughout the coal region, as labour became less productive. At one time 
we have had turn-outs among coal operators, and at another among miners 
and labourers, and the result has been that the year has been one of almost 
total loss. 

If we compare with this the period that elapsed between 1844 and 1847, 
we see in the latter a steady increase in the productive power, attended by an 
increasing tendency to harmony among employers and employed, the natural 
result of improvement of condition. 

The exhaustion resulting from the maintenance of the colonial system thus 
produces a tendency to turbulence and radicalism that compels the mainte- 
nance of armies, followed by further exhaustion, and all the injurious results 
are borne by labour and land. Consumption cannot exceed production, and 
whatever decreases the proportion which hands to produce bear to mouths to 
be fed and backs to be clothed, diminishes the share of food and clothing that falls 
to each. England now raises almost seventy millions of taxes, very many of 
which are required for the payment of those employed in the work of collecting 
the remaining millions that are paid into the treasury. To these millions raised 
by the State must now be added eight millions for the support of one-ninth of 
the population of England who are paupers, and many more for the support of 
the paupers of Ireland. Here is a burden of above four hundred millions 
of dollars, the whole weight of which is to be borne by the labour and land 
of England and of the world, and ultimately by her land alone. The people 
can fly, but the land cannot. The power to pay rent depends upon the power 
to make the land produce, and, as that increases with increase of numbers, 
and improvement in the physical, moral, and intellectual condition of the 
labourer, it diminishes with diminution of numbers and deterioration of con- 
dition. In the three years ending with 1845, the consumption of spirits, 
domestic and colonial, amounted to . . . . 23, 422, 295 galls. 
In the three years ending in 1848, it was . . . 25,320,861* " 
showing a tendency to inebriation increasing with the diminishing power to 
obtain in return for labour a suitable reward. 

Demoralization produces pauperism, and pauperism increases demoraliza- 
tion, and the inebriate paupers must be supported out of the products of the 
land. The surplus food of Russia has diminished cultivation in Ireland, and 
has, of course, diminished production. England is now overrun with Irish 
labourers and paupers, and what has happened in Ireland must follow in 
England. More corn will continue to be imported, and more cotton goods 
will be exported j but the products of the land, out of which rent and taxes 
are to be paid, will diminish, and, while the mouths to be fed will increase 
in number, the food with which they are to be fed will continue to diminish 
in quantity. The corn-laws constituted the barrier of the land-holders of 
England against the effects of the system by which England was deteriorat- 
ing the value of labour and land throughout the world. Their abolition tends 
to bring it daily more and more upon themselves, and the only remedy is to 
be found in the abolition of the colonial system and the suppression of the 
fleets and armies which its existence renders necessary. The diminution of 
unproductive consumers will be attended by an increase of productive ones, 
and the exports of England will then again represent home-grown food, to 
be returned in sugar, tea, coffee, and cotton, and with every step in that di- 
rection the necessity for taxes will diminish, and the power to pay them will 
increase. 

If we look at home, we see a tendency to increase in the necessity for taxa- 

* This fact is adduced by the Edinburgh Review, July, 1849, as one of the evidences 
of the advantage resulting from free trade. 



196 



THE HARMONY OF INTERESTS. 



tion with every step towards subjection to the colonial system, and dirni* 
nished tendency thereto as we move in the opposite direction. The ex- 
penses of the government under the administration of Mr. Monroe averaged 
thirteen millions. Those of the administration of Mr. Adams averaged little 
over twelve millions. During the existence of the tariff of 1828, and in the 
early period of the Compromise, we find the expenditure maintained at thir- 
teen millions, but with the gradual dispersion of population we arrive at 
the Florida war, and an expenditure of thirty, thirty-seven, and thirty-three 
millions in three successive years, and afterwards falling gradually until we 
find it at twenty millions in the period of 1843 to 1844. With the adop- 
tion of free-trade doctrines, we find an increasing tendency to war, and the 
expenditure rising to sixty millions. Looking at all these facts, it is difficult 
to arrive at any other conclusion than that protection tends to increase the 
demand for spades and ploughs, and the reward of labour, and to diminish 
that demand for swords and muskets which leads to the destruction of both 
the labourer and the plough. The friend of peace is therefore directly 
interested in the destruction of the English monopoly of machinery. 

If protection be a war upon labour and capital, we should find it attended 
with diminished production and increased expenditures. If, on the contrary, 
it be, as its name imports, protection to both labourer and capitalist, tending 
to augment the value of the labourer, then it should be attended with in- 
creased production and diminished expenditure. We have now before us 
the fact, that, while the government, from 1824 to 1833, was administered 
at about one dollar per head, the cost of administration rose in the free-trade 
period to more than two dollars, to fall again to one in the period of pro- 
tection, and to rise to almost three in the present free-trade one.* Protection 
looks homeward. Free trade, under existing circumstances, looks abroad, and 
needs fleets and armies, with hosts of officers, great custom-houses and ware- 
houses, branch mints in California and New York, ministers plenipotentiary 
and charges without number abroad, and hosts of officers at home, to be sup- 
ported out of the proceeds of labour and land. The one looks to cheap and 
good government ; the other to a splendid one, profitable to the governors, 
but fatal to the governed. 

We have seen that under protection the value of labour at home has in- 
creased, and that therewith there has been an increase in the power of con- 
suming foreign commodities, such as we do not ourselves produce. We have 
also seen that while it tends to increase the importation of people from abroad, 
it tends likewise to facilitate the transmission to Europe of our bulky com- 
modities, by enabling us to send them at almost nominal freights, and that 
thus, while it raises the value of labour throughout the world by diminishing 
the number of persons seeking employment, it also raises it by enabling those 
who remain abroad to obtain sugar, cotton, coffee, and the other productions 
of the West, at diminished cost. The way to promote harmony among 
nations, and in the bosom of nations, is to increase the value of man, and 
such has been, and must continue to be the result of protection. That object 
once accomplished, all necessity for custom-houses, whether for protection or 
for revenue, will cease. 



The man who contributes to the support of war makes war, and if he does 
it voluntarily he is accountable for the results thereof in the deterioration and 

* Independently of the amount of money paid for the expenses of the Mexican war 
and the purchase of California, ninety thousand land warrants have been issued to sol 
diers who served in the war, giving to them as bounty 13,800,000 acres. Estimating 
this land at the government price, $1 25 an acre, we have an aggregate of $17,230,000. 



THE HARMONY OF INTERESTS. 



197 



destruction of his fellow-men. Of all the people of the world, there are none 
who have contributed so largely as ourselves to the maintenance of the fleets 
and armies by which Ireland has been ruined, and war has been carried 
throughout Europe and Asia. So far as we have done this voluntarily, we 
are as much responsible for the destruction of life and property in China, 
Scinde, Afghanistan, and the Punjaub, as the men by whose command these 
things were done. 

We have seen that England produces little to export, yet is she enabled to 
consume much. The producer obtains little for his cotton, yet the labourer 
obtains little clothing for the time employed in converting the cotton into 
cloth. The sugar-planter obtains little iron for his sugar, yet the miner has 
little sugar for his labour. The tobacco-grower has little cloth for his pro- 
duct, but the spinner can consume little tobacco. The reason for all this is 
to be found in the fact that between the consumer and the producer stands a 
host of exchangers, the greatest of which is that which collects taxes to be 
paid out for the support of fleets and armies. E very pound of cotton that travels 
on an English railway, contributes its proportion to the £108,000 of taxes 
paid by the single London and North-western railway, the £68,000 paid by 
the Great Western,* or some other of the immense sums paid by other rail- 
ways. Every pound of tobacco pays 36-. = 72 cents, towards the mainte- 
nance of the fleets and armies of Great Britain, in addition to its share of the 
taxes on, warehouses, bills of exchange, promissory notes, and of the thousand 
other taxes paid by the various persons who stand between the producer and 
the consumer. These men produce nothing themselves, and their taxes must 
be paid for them by the land and labour that do produce — whether it be 
foreign or domestic. 

England is now the great war-making power of the world. It is by means 
of the monopoly of machinery for the production of iron, and for the conver- 
sion of cotton into cloth, that she is enabled to tax the world for the mainte- 
nance of her fleets and armies, f for the prosecution of those wars. To destroy 
her power to make war would be to bring about peace. Protection tends to 
limit her power to tax the farmers and planters of the world, and thus to 
limit her power to raise revenue for the payment of soldiers and sailors, while 
it tends to raise the value of man, and thus make soldiers and sailors more 
costly. In both ways it tends to diminish the power to maintain fleets and 
armies, and to promote the maintenance of peace. Every friend of peace is 
therefore bound to use his efforts for the destruction of the monopoly si/stem. 

The London Times recently published, with approbation, a letter from the 
East Indies — from a British oflacer engaged in the battle of Goodjerat, from 
which the following is an extract. It is deserving the careful consideration 
of every man who has heretofore aided in the maintenance of the system : — 

"The enemy were in the sands trying to escape, and our men knocking them over like 
dogs. . . Some of our men screamed out, 'They are off!' Fordyce's troops went off at a 
gallop, our men giving them three cheers— such cheers — it was a perfect scream of delight 
and eagerness ! and you may be sure I assisted and yelled till I was hoarse ! . . . Every 
wounded Sikh was either shot or bayoneted (! !) . . 1 rushed up with a few of the 
grenadiers, and found four men re-loading their pieces ; three were bayoneted, and I was 
hacking away at the head of the fourth, when Compton, of the grenadiers, shot him. The 



* North British Review, August, 1849. 

jSir Charles Napier has addressed a letter to the public, which fills five closely 
printed columns of the Times, upon the subject of the navy and its expenses. The sum 
and substance of what he says seems to be, " that we have spent about ninety millions 
sterling during the last twenty-eight years in rebuilding our navy twice over, and now we 
cannot even find the fragments. 1 ' Such are the results of the system of " ships, colonies, 
and commerce." 



198 



THE HAKMONY OF INTERESTS. 



last shot was fired at an unfortunate Goorer in the camp, who was seated quietly reading 
their Grunth ! . . . We waited at this place about two hours; and I can assure you they 
were about the j 'oiliest two hours 1 ever passed. I never enjoyed a bottle of beer so much 
in all my life!" 

CHAPTER NINETEENTH. 
HOW PROTECTION AFFECTS THE EXCHANGER. 

The exchanger stands between the producer and the consumer. He him- 
self produces nothing, although consuming much, in exchange for which he 
gives only services. He buys a bale of cloth and divides it among the con- 
sumers, giving a piece to one and a yard to another, but he makes no 
change in the quantity or quality of the commodities that pass through his 
hands. The bale of cloth would clothe as many men, and the cargo of flour 
would feed as many, without his services, as with them. Nevertheless, the 
exchanger takes rank before the producer. The merchants of London, of 
New York, and of Boston, have more influence over the action of govern- 
ment, and over public opinion, than twenty, fifty, or even one hundred times 
the number of men whose every hour is given to increasing the quantity and 
improving the quality of things necessary to the use of man. 

The reason that such is the case is that the present system of trade tends 
to increase the necessities of the producers for going to distant markets, and 
to diminish their power so to do. AYhen the producer of iron takes his place 
by the side of his producer of food, the latter exchanges his potatoes, his cab- 
bages, his veal, his milk, and his butter, directly with the former, and obtains 
his iron at little cost of labour. He is thereby enabled to improve his wagon 
and his roads, and to go to market cheaply, thus increasing his powers while 
diminishing his necessities. The more distant the consumer and the producer, 
the greater must be the quantity of machinery of exchange, and the poorer 
must be its quality, and every such change in regard to either tends to the 
impoverishment of the farmer and planter. 

Such being the case, it might be supposed that here was a case of discord. 
The exchangers would suffer by the adoption of measures tending to bring 
the consumers to take their places by each other. Directly the reverse, how- 
ever, is the fact. The quantity to be exchanged depends on the extent of 
the surplus that is produced, and that increases with prodigious rapidity as 
the power of production is increased. The man who produces no more food 
than is absolutely necessary for his own consumption, has nothing to exchange 
for cloth or iron. Once fed, he may exchange the whole surplus, whatever 
it be, and therefore it is that the amount of exchanges increases with such 
wonderful rapidity when production increases, as was the case from 1843 to 
1847. 

The larger the return to labour applied to production, the less must be the 
necessity for seeking employment in the work of exchange, and the less will 
be the competition in trade. Our cities are filled with young men from the 
country who would have remained at home among parents and friends, had 
the cotton or woollens factory, the furnace or the rolling-mill, been there to 
give them employment j but as it was not there, they have been compelled 
to add themselves to the already almost infinite number of clerks, hoping, 
and vainly hoping, to obtain stores or shops for themselves. By bringing 
the consumer to the side of the producer, such young men would, in future, 
remain at home to swell the number of producers, and to increase the amount 
of production, enabling each exchanger to perform a larger amount of busi 
ness, and to grow rich with the same rate of commission that now keeps him 
poor 



THE HARMONY OF INTERESTS. 



199 



It is asserted that of all the persons engaged in trade, in our cities, four- 
fifths fail. The cause is to be found in the fact that so many are forced 
into trade, for want of being enabled to apply themselves to production, and 
that when there they are exposed to the effects of the enormous changes 
which result from the existence of the English monopoly system. Iron 
sells at one time at ten pounds, and soon after at five. The man of small 
capital, who has a stock on hand, is ruined. Cottons and woollens change in 
like manner. At one moment England desires to sell iron and cloth in ex- 
change for certificates of debt, and money is said to be plenty. At the next, 
she asks to be paid, and money becomes scarce. The little capitalist is 
ruined by the change. The consequence is, that our cities are filled with 
men who have adventured in trade, and failed. 

In England, these disastrous effects are far more widely felt. The country 
is filled with young men anxious to be employed in any department of 
trade, for in the work of production can be found no demand for time or 
mind, unless accompanied with large capital. The consequence is a perpe- 
tual strife for obtaining even the means of subsistence, among shopmen, 
clerks, and journeymen,* while the unceasing changes carry ruin, at brief 
intervals, among the employers. The last three years have seen to disappear 
a large number of the principal trading firms in the kingdom, and the 
exhibits they have made of their affairs afford proof conclusive of the ruinous 
character of the system. In Liverpool, at one time, there were 7000 houses 
and stores unoccupied. What had become of those who had been their occu- 
pants ? 

The tendency of the whole system is to produce a necessity for trade, and 
to diminish the power to maintain trade. " Commerce," there, "is king," 
and like other kings, he is exhausting his own subjects. Having plundered 
and ruined India, the West Indies, Ireland, Portugal, and all other countries 
subject to his control, he is now doing the same at home. With every step 
he is diminishing the power of applying labour to production, and increasing 
the necessity for looking to trade as the only means of employing time, 
talent, or capital, with constantly decreasing return to all ; and hence it is 
that so large a portion of the people of the United Kingdom desire to escape 
to other lands, where Commerce, finding in agriculture and manufactures his 
equals, cannot be king. In his proper place he is most useful, but as 
master he has always proved a tyrant worse than any recorded even in the 
annals of Rome. The object of the colonial system was that of making 
him master, and its effects are now felt at home as well as abroad. The 
object of protection is to put an end to his tyranny, and to bring him back 
to his true condition j and among the whole people there are none whose 
interests are more to be promoted by the accomplishment of that object than 
those who are now engaged in commerce, because with every step it will in- 
crease the amount of exchanges to be performed, without a corresponding 
increase in the number of exchangers. 



* " Fourteen hundred tailors are now in London totally unemployed, and hundreds daily 
applying for relief to the houses of call; the funds are, however, exhausted. Nine hun- 
dred shoemakers out of work have their names on the books, and seventeen hundred are 
working for half wages. The curriers and leather-dressers are in the same situation. 
There were never known so many working jewellers out of employ, and meetings of the 
trade are now holding to petition parliament for protection against the competition of 
foreigr labour. ! ' — Morning Post. 



TEE HARMONY OF INTERESTS. 



CHAPTER TWENTIETH. 
HOW PROTECTION AFFECTS WOMAN. 

"With every increase in the value of labour and land, the condition of 
woman is improved. With every improvement in her condition, she has 
more leisure to devote to the care of her children, and to fitting them worthily 
to fill their station in society, giving value to labour and land. If protection 
be "a war upon labour and capital," it must tend to diminution in the 
value of labour and land, and to deterioration in the condition of the weaker 
sex. How far that is the case we may now examine. 

Throughout a large portion of this country, the time of women is almost 
entirely valueless. They would gladly work if they could, but there is no 
employment but that on the farm, for which they are not fitted. Place 
in every county of the Union a mill, and there will thus be produced a demand 
for that now surplus labour, and the workers in the mill will obtain more 
and better food and clothing, and they will be able to obtain more and better 
clothing, and education, and books by which to improve their minds, and fit 
them to fill the station of mothers, to which they will then be called. For 
want of local employment the young men are forced to seek the cities, or to 
fly to the West, and thousands and tens of thousands of women remain at 
home unmarried, while other thousands also seek the cities in search of em- 
ployment, and terminate their career as prostitutes, because unable to com- 
pete with the " cheap" labour of the unhappy subjects of the following arti- 
cle, which I take from one of the newspapers of the day : — 

" The distressed needle-women of London have been made the object of a commission 
of inquiry instituted by the Morning Chronicle. Three gentlemen well Known in litera- 
ture have examined the state of this unfortunate class, and the result is, that there lives in 
London a body of about 33,000 women permanently at the starvation point; working at 
the wages of a few pence a day. 

" The greater portion of these poor creatures, living, as they do, far beyond the social 
state, resort to prostitution, as a means of eking out their miserable subsistence ; whenever 
the pressure threatens their extinction, then they turn into the street, and pauperism runs 
into inevitable vice. Since the disclosures of the Morning Chronicle, many humane 
persons have forwarded considerable sums of money to the office of that journal for dis- 
tribution among the most necessitous objects ; and Mr. Sidney Herbert has come forward 
to found a society for promoting their emigration. There is something like half a million 
of women in excess of men in Great Britain ; there is a corresponding excess of males in 
the British Australian Colonies. The society above mentioned aims to bring these mar- 
riageable parties in contact; and it is hoped, that when once it is in operation, govern- 
ment will assist it with funds. It costs some £15 to transport a passenger to Australia. 
Now, if private benevolence raises a sum of £30,000, this will only relieve 2000 of the 
sufferers : a mere fraction, whose absence would not be sensible in the metropolis. It 
would require ten times that amount to lade out the misery to the proper extent, and also 
to satisfy the wants of the colonists." 

" Commerce is king," and such are his female subjects. To the same 
level must fall all those who are under the necessity of competing with them, 
and such are even now the results of the approach to the system that looks to 
the maintenance of the English monopoly as being freedom of trade. The 
compensation for female labour is miserably small, even now, but it must fall 
far lower when we shall be called upon to settle the account for the modicum 
of iron, wool, silk, and earthenware that we receive in exchange for all our 
cotton, tobacco, rice, flour, pork, cheese, butter, and evidences of debt. 



" So God created man in his own image, in the image of God created he 
him j male and female created he them. And God blessed them and said 



THE HARMONY OF INTERESTS. 



201 



onto them, Be fruitful and multiply, and replenish the earth and sub- 
due it." 

Such was the first command of God to man on earth, and, as he does or 
docs not comply with it, he is found a moral or immoral being. If the as- 
sociation of man with his fellow-man tend to the elevation of character and 
to the promotion of civilization, how infinitely more is such the result of that 
intimate association resulting from obedience to the command, "Be fruitful 
and multiply." The relation of husband and wife, and that of parent and 
child, are both essential to the development of all that is good and kind, gen- 
tle and thoughtful. The desire to provide for the wife and the child prompts 
the husband to labour, for the purpose of acquiring the means of present sup- 
port, and to economy as a means of preparation for the future. The desire 
to provide for the husband and the children prompts the wife to exertions 
that would otherwise have been deemed impossible, and to sacrifices that 
none but a wife or a mother could make. 

The modern school of political economy says, "Be not fruitful; do not mul- 
tiply. Population tends to increase faster than food." It prescribes disobe- 
dience to the earliest of God's commands. Obedience thereto, in those who 
are poor, is denounced as improvidence ; and to those who are so improvi- 
dent as to marry, " with no provision for the future, no sure and ample sup- 
port even for the present," it is thought "important to pronounce distinctly 
that, on no principle of social right or justice, have they any claim to share 
the earnings or the savings of their more prudent, more energetic, more self- 
denying fellow-citizens."* To have a wife for whom to labour, and with whom 
to enjoy the fruits of labour, is a luxury, abstinence from which is placed 
high among the virtues. To have children to develope all the kindly and pro- 
vident feelings of the parents, is a crime worthy of punishment. Charity 
is .denounced as tending to promote the growth of population. To rent land 
at less than the full price, is an error, because it tends to increase the num- 
ber to be fed. To clear the land of thousands whose ancestors have lived and 
died on the spot, is "improvement." Cottage allotments are but places for 
breeding paupers. 

Southey denounced the Byronian school of poetry as " satanic," and so 
may we. fairly do with the school of political economy that has grown out 
of the colonial system, and the desire to make of England "the work-shop 
of the world." It teaches every thing but Christianity, and that any feel- 
ings of kindness towards those who are so unfortunate as to be poor should 
still remain in England, is due to the fact that those who teach it have not 
in their doctrine sufficient faith to practise what they preach. 

The direct tendency of the existing monopoly of machinery which it is 
the object of free trade to maintain, is towards barbarism. It drives hundreds 
of thousands of Englishmen to abandon mothers, wives, and sisters, and bar- 
barize themselves in the wilderness, while of those who remain behind a large 
1 portion are too poor to marry, the consequences of which are seen in the 
immense extent of prostitution and the perpetual occurrence of child murder. 
In this country it is the same. Of the almost hundreds of thousands of men 
who have fled to the wilds of Oregon or California, a vast portion would have 
remained at home with mothers and sisters had the consumer been allowed 
to take his place by the side of the producer, as he would long since have 
done, but for the existence of this most unnatural system. 

Among the women of the world, there is a perfect harmony of interests. 
It is to the interest of all that the condition of all should be elevated, and 
Buch must be the result of an increase in the value of labour. The object 



* Edinburgh Review, October, 1S49. 

26 



202 



I THE HARMONY OF INTERESTS. 



of protection is that of raising throughout the world the value of man, and 
thus improving the condition of woman. Every woman, therefore, who has 
at heart the elevation of her fellow-women throughout the world, should 
advocate the cause of protection. 

CHAPTER TWENTY-FIRST. 
HOW PROTECTION AFFECTS MORALS. 

The moral man is sensible of the duties he owes to his wife, his children, 
society, and himself. He frequents neither taverns nor gaming-houses. His 
place is home. 

The more perfect the morality the more productive will be the labour of a 
community, and the greater will be the power of its members to improve 
their moral and intellectual condition. If protection be " a war upon labour 
and capital," it must tend to the deterioration of morality and the diminu- 
tion of the reward of labour. 

The more equal the division of a community between the sexes, the greater 
will be the power to contract matrimony, and the higher will be morality. 
The monopoly system tends to expel the men and produce inequality in the 
number of the sexes, and thus to diminish the power to contract matrimony, 
thereby producing a tendency to immorality. The object of protection is to 
enable men to remain at home, and thus bring about equality, which cannot 
exist where the tendency to dispersion exists. 

The more men can remain at home, the better they can perform their du- 
ties to their children. The monopoly system tends to compel them to per- 
form their exchanges in distant markets and to separate themselves from 
wives and children. The object of protection is to bring the consumer to 
take his place by the side of the producer, and enable them to effect their 
exchanges at home. 

The more directly the consumer exchanges with the producer, the less will 
be the disposition and the power to commit frauds. The farmer of Illinois 
has no object in adulterating his corn, because corn is cheap; but the miller 
of England mixes beans with the corn, because corn is dear. The planter 
of Alabama would gain nothing by substituting flour for cotton, because the 
latter is cheap ; but the manufacturer of England does so because cotton is 
dear. The coffee planter delivers coffee. The English shopkeeper substi- 
tutes chicory for coffee, because the latter is dear. The inducement to 
fraud in these cases results from the distance between the producer and the 
consumer, which it is the object of protection to diminish. The shoemaker 
makes good shoes for his customers ; but he makes indifferent ones for the 
traders who deal with persons that are distant. The gunsmith furnishes to 
his neighbours guns that will stand the proof ) but when he makes others to 
be sold in Africa, he cares little if they burst at the first fire. The necessity 
for maintaining the monopoly of machinery now enjoyed by England leads 
to frauds and forgeries of every description, with a view to displace the 
foreign produce and deceive the foreign producer.* The power to commit 

* As a specimen of this, I take the following from one of the journals of the day : 
« We are surprised to see ginghams in market, sent out from England by the house of 
A. & S. Henry & Co. of Manchester, imitating the above goods in patterns, width, and 
style of finish. But a most palpable and unfair imitation is in the label, where, preserv- 
ing the same general appearances as to size, colour of paper and ornaments, the word 
Lancastrian is substituted for Lancaster. That the whole is a manifest and intentional 
counterfeit, there cannot be a doubt. The goods will, undoubtedly, be sold for American 
Lancaster ginghams, to which they are inferior in firmness of fabric and permanency of 
colour, to the manifest injury of the profits and reputation of the American manufacturer 
- Boston paper. 



TEE HARMONY OF INTERESTS. 



203 



frauds thus results from the distance between the consumer and the pro- 
ducer. Protection looks to bringing them near together, and thus dimi- 
nishing that power. 

The planter who exchanges on the spot with the iron-master and the 
miller, makes large crops and grows rich, and the gain resulting from success- 
ful frauds would be trifling compared with the loss of character. The one 
who is distant from both makes small crops, which are sensibly increased in 
amount by the substitution of stones in lieu of cotton or tobacco. The 
inducement to commit frauds here results from the distance between the con- 
sumer and the producer, and is diminished as the loom and the anvil come 
nearer to the plough and the harrow. 

The man who makes his exchanges in distant markets spends much time 
on the road and in taverns, and is liable to be led into dissipation. The 
more he can effect his exchanges at home, the less is the danger of any such 
result. The object of the monopoly system is that of compelling him to 
effect all his exchanges at a distance, and to employ for that purpose nume- 
rous wagoners, porters, sailors, and other persons, most of whom have scarcely 
any home except the tavern. 

The more uniform the standard of value, the less does trade resemble 
gambling. The object of the monopoly system is to subject the produce of 
the world to a standard of the most variable kind, and to render agriculture, 
manufactures, and trade, mere gambling. The object of protection is to 
withdraw the produce of the world from that standard, enabling every com- 
munity to measure the products of its labour by its own standard, giving 
labour for labour. 

The object of the English system is to promote centralization, and its 
necessary consequence is that of compelling the dispersion of man in 
search of food.* London and Liverpool, Manchester and Birmingham, 
have grown with vast rapidity by the same system which has exhausted 
Ireland, India, and the West Indies. The same journal informs us of 
the construction of a new town opposite Liverpool, of the great additions 
to London, and of the absolute necessity for promoting emigration from Ire- 
land, Scotland, and even from England. As each successive province is 
exhausted, there arises a desire, and even a necessity for adding to the list. 
Bengal and Bombay having ceased to be productive, Afghanistan is attempted, 
and the Punjaub is conquered. The ruin of the West Indies is followed by 
an invasion of China, for the purpose of compelling the Chinese to perfect 
freedom of trade. The Highlands are depopulated, and Australia is colonized. 

Mr. Jefferson held great cities to be "great sores." He desired that the 
manufacturer should take his place by the side of the agriculturist — that the 
loom and the anvil sftuld be in close proximity to the plough and the harrow. 
Mr. Jefferson looked and thought for himself. He had studied political 
economy before it became necessary for Mr. Malthus to invent a theory of 
population that should satisfactorily account for the scarcity of food under 



* " To those who have never reflected on the subject, it may seem like exaggeration to 
say that, as a general fact, at least nine-tenths of the lower orders suffer physically, 
morally, and intellectually, from being over-worked and under-fed; and yet I am con- 
vinced that the more the subject shall be investigated, the more deeply shall we become 
impressed with the truth and importance of the statement. It is true that but few 
persons die from direct starvation, or the absolute want of food for several successive 
days, but it is not the less certain that thousands upon thousands are annually cut off, whose 
lives have been greatly shortened by excess of labour and deficiency of nourishment. 
* * It is a rare thing for a hard-working artisan to arrive at a good old age ; almost al 
become prematurely old, and die long before the natural term of life." — Combe's Philosophy 
of Digestion. 



204 



THE HARMONY OF INTERESTS. 



the unnatural policy of England, and thus relieve the law-makers of that 
country from all charge of mis-government. He studied, too, before Mr. 
Iiicardo had invented a theory of rent, for the maintenance of which it was 
necessary to prove that the poor cultivator, beginning the work of settlement, 
always commenced upon the rich soils — the swamps and river-bottoms — and 
that with the progress of population he had recourse to the poor soils of the 
hills, yielding a constantly diminishing return to labour — and therefore it was 
that he thought for himself. Modern financiers have blindly adopted the 
English system, based on the theories of Malthus and Iiicardo, and the per- 
fection of civilization is now held to be found in that system which shall 
most rapidly build up great cities, and most widely separate the manufacturer 
from the agriculturist. The more perfect the centralization, the greater, 
according to them, will be the tendency towards improvement. 

Mr. Jefferson was in favour of combined action, as being that which would 
most tend to promote human improvement, physical, moral, intellectual, and 
political. That it does so, would seem to be obvious, as it is where com- 
bination of action most exists that men live best and are best instructed — 
commit least crimes, and think most for themselves. There, too, there exists 
the strongest desire to have protection. 

A recent traveller* in the United States, says that " the facility with which 
every people conscientiously accommodate their speculative opinions to their 
local and individual interests, is sufficiently demonstrated by the fact, that 
the several States and sections of States, u as they successively embark in 
the manufacture, whether of iron, cotton, or other articles, become imme- 
diately converts to protectionist views, against which they had previously 
declaimed. " 

It is here supposed that the desire for protection results from a selfish 
desire to tax others, but the persons exclusively devoted to manufactures of 
any kind are too few in number to affect the elections, and yet wherever mills 
or furnaces are established, the majority of the people become advocates of 
the doctrine of protection, and that majority mainly consists of agriculturists, 
— farmers and planters. Why it is so, may be found in the fact that they ex- 
perience the benefits resulting from making a market on the land for the 
products of the land, and desire that their neighbour's may do the same. 
Ignorant selfishness would induce them to desire to retain for themselves the 
advantage they had gained. Enlightened selfishness would induce them to 
teach others that which they themselves had learned. 

Ignorant selfishness is the characteristic of the savage. It disappears as 
men acquire the habit of association with their neighbour men. The pro- 
claimed object of the monopoly system is that of producing a necessity for 
scattering ourselves over large surfaces, and thus merging the difficulty of 
association, and the object is attained. " The prospect of heaven itself," says 
Cooper, in one of his novels, " would have no charm for an American of the 
backwoods, if he thought there was any place further west/' 

Such is the common impression. It is believed that men separate from 
each other because of something in their composition that tends to produce a 
desire for flying to wild lands, there probably to perish of fever, brought on 
by exposure, and certainly to leave behind them all that tends to make life 
desirable. Such is not the character of man anywhere. He is everywhere 
disposed to remain at home, when he can, and if the farmers and planters of 
the Union can be brought to understand their true interests, at home he will 
remain, and doing so, his condition and that of all around him, will be im- 

* Sir Charles Lyell. 



THE HARMONY OF INTERESTS. 



205 



proved. The habit of association is necessary to the improvement of man. 
With it comes the love of the good and the beautiful. "I wish/' says the 
author of a recent agricultural address, " that we could create a general 
passion for gardening and horticulture. We want," he continues, " more 
beauty about our houses. The scenes of childhood are the memories of our 
future years. Let our dwellings be beautified with plants and flowers. Flow- 
ers are, in the language of a late cultivator, 1 the playthings of childhood and 
the ornaments of the grave ; they raise smiling looks to man and grateful 
ones to God.' " 

We do want more beauty about our houses, and not only about our houses 
but about our minds, and that it may be obtained, we must rid ourselves of 
a system which makes the producer the servant of the exchanger. Such is 
the object of protection. 

It is most truly said that "there is no friendship in trade." As now carried 
on, it certainly does not tend to promote kindly feelings among the human 
race, nor can it do so while the system remains unchanged. The great 
object of traders appears to be the production of discord.. By so doing, 
England has obtained the supreme control of India. Her journals are un- 
ceasingly engaged in sowing discord among the various portions of this Union, 
and the effort would be successful were it not that there is no real dis- 
cordance in their true interests. 

Tt is time that the people of Great Britain should open their eyes to the 
fact that their progress is in the same direction in which have gone the com- 
munities of Athens, and Rome, and every other that has desired to support 
itself by the labour of others. It is time that they should awake to the fact 
that the numerous and splendid gin-shops, the perpetual recurrence of child- 
murder for the purpose of plundering burial societies, and the enormous in- 
crease of crime* and pauperism, are but the natural consequence of a system 
that tends to drive capital from the land, to be employed in spindles and 



* " Humanity cries to us from the depths. If we will not answer her, it were better a 
millstone were tied about our necks, and that we were cast into the sea. Have we no 
sense of the precipice on which we stand ? Have not the books of the prophetess been 
one by one burnt before our eyes — and does not the sybil even now knock at our doors to 
offer us her final volume, ere she turn from us and leave us to the Furies? Crime, not 
stealing, but striding onward. Murders, poisonings, becoming almost a domestic institu- 
tion among our villages — husband, children, parents, drugged to their final home for the 
sake of the burial fees. Vice within the law, keeping pace with offence without. Incest 
winked at by our magistracy from its fearful frequency in our squalid peasant dwellings. 
Taxation reaching beyond the point at which resources can meet it, so that, at increasingly 
shorter intervals, we have to borrow from ourselves to make expenditure square with 
income. Poor Laws extended to Scotland and Ireland, where they were never known 
before, and new Poor Laws failing in England to check the advance of rates, and the 
growth of inveterate beggary, until property threatens to be swallowed up by the pro- 
pertyless, and a terrible communism to be realized among us by a legalized division of 
the goods of those who have, among those who have not — the fearfullest socialism, the 
equal republic of beggary. 'Speak! strike! redress!" Three millions and a half of the 
houseless and homeless, the desperate, the broken, the lost, plead to you in a small still 
voice, yet louder than the mouthing theories of constitution-mongers. Man, abused, in 
suited, degraded, shows to you his social scars, his broken members, his maimed carcass, 
blurred in the conflict of a selfish and abused community. 

" We say it must no longer be. We are a spectacle to gods and men — 1 a by-word and 
a hissing to the nations.' Savages grow up in the midst of our feather-head civilization, 
wilder, more forlorn, more forgotten, and neglected than the Camanches, or the earth- 
eaters of New Holland. Ragged foundlings, deserted infant wretchedness, paupers here- 
ditary, boasting a beggar pedigree older than many of our nobles, grow 'up from year 
to year, generation to generation, eat with brazen front into the substance of struggling 
industry.' - — The Mother Country, by Sydney Smith. 



206 



THE HARMONY OF INTERESTS. 



ships, and labour from the healthful and inspiring pursuits of the country, to 
seek employment in Liverpool and Manchester, where severe labour in the 
effort to underwork the poor Hindoo, and drive him from his loom, is re- 
warded with just sufficient to keep the labourer from starving in the lanes 
and cellars with which those cities so much abound. 

That " there is no friendship in trade," is most true, and yet trade is the 
deity worshipped in this school. In it " commerce is king," and yet to com- 
merce we owe much of the existing demoralization of the world. The anx- 
iety to sell cheap induces the manufacturer to substitute cotton for silk, and 
flour for cotton, and leads to frauds and adulterations of every description. 
Bankruptcy and loss of honour follow in the train of its perpetual revulsions. 
To obtain intelligence an hour beforehand of an approaching famine, and 
thus to be enabled to buy corn at less than it is worth, or to hear in advance 
of the prospect of good harvests, and to sell it at more than it is worth, is 
but an evidence of superior sagacity. To buy your coat in the cheapest 
market, careless what are the sufferings of the poor tailor, and sell your 
grain in the dearest, though your neighbour may be starving, is the cardinal 
principle of this school. 

A very slight examination will suffice to convince the reader that, as has 
been already shown, these frauds and overreachings increase in the ratio of 
the distance between the consumer and the producer. The food that has 
travelled far is dear, and worthy to be mixed with beans. The cotton pro- 
duced in remote lands is dear, and it is profitable to mix it with flour. The 
shoemaker who supplies the auctions uses poor leather, and employs 
poor workmen.* The object of protection is that of bringing the consumer 
of food to the side of its producer, there to eat plenty of good and nourish- 
ing food ) the consumer of cotton to the side of its producer that he may not 
need to wear a mixture of wool and paste ; and the shoemaker to the side of 
the farmer and planter, that the latter may be supplied with " custom-work," 
and not " slop-work." By this he gains doubly. He gives less food, and 
gets better clothing in return. By so doing, his own physical condition and 
the moral condition of the shoemaker are both improved. 

The whole tendency of the system is to the production of a gambling 
spirit. In England, it makes railroad kings, ending in railroad bankrupts, 
like Henry Hudson. If we could trace the effect of the great speculation 
of which this man was the father, we should find thousands and tens of thou- 
sands of husbands and wives, parents and children, utterly beggared to build 
up the fortunes of the few, and thus increase the inequality of social condi- 
tion which lies at the root of all evil. If we examine it here, we see it send- 
ing tens of thousands to California, eager for gold, there to lose both health 
and life.f It is sending thousands of boys and girls to our cities — the former 

* Take, as an illustration in the system, the fraud in carpets, such as are usually sold 
at auction. "The head end of the piece is woven firmly for a few yards, when the web 
is gradually slackened, so that the inside of the piece bears no comparison with the out- 
side. This is done so adroitly that it is impossible for any, but the best judges to tell in 
what the cheat consists. There is a double evil in this imposture, for the fabric not only 
grows poorer and thinner as the piece is unrolled, but the figures, containing of course 
the same number of threads throughout, will not match, their size being increased with 
the slackness in weaving. This is not only a positive cheat, but it greatly interferes with 
the honest dealer, whose goods being alike throughout, cannot of course compete in price. 
It is incredible to what an extent this practice is carried, and it is high time there was 
sornr legal remedy.'* — Dry Goods Reporter. 

"j- ''This is one of the strangest places in Christendom. I know many men, who wero 
models of piety, morality, and all that sort of thing, when they first arrived here, and 

Vol. Ill— li) 



THE HARMONY OF INTERESTS. 



207 



to become shopmen, and the latter prostitutes, while hundreds of thousands! 
are at the same time making their way to the West, there to begin the work 
of cultivation, while millions upon millions of acres in the old States remain 
untouched. With every step of our progress in that direction, social ine- 
quality tends to increase. The skilful speculator realizes a fortune by the 
same operation that ruins hundreds around him, and adds to his fortune by 
buying their property under the hammer of the sheriff. The wealthy manu- 
facturer is unmoved by revulsions in the British market which sweep away 
his competitors, and, when the storm blows over, he is enabled to double, 
treble, or quadruple, his already overgrown fortune. The consequence is, that 
great manufacturing towns spring up in one quarter of the Union, while al- 
most every effort to localize manufactures (thus bringing the loom and the 
anvil really to the side of the plough and the harrow) is followed by ruin. 
The system tends to make the rich richer and the poor poorer. The coal 
miner of the present year works for half wages, but the coal speculator ob- 
tains double profits, and thus is it ever — the producer is sacrificed to the ex- 
changer. With the growth of the exchanging class, great cities rise up, filled 
with shops, at which men can cheaply become intoxicated. New York has 
4567 places at which liquor is sold, and the Five-Points are peopled with the 
men who make Astor-place riots. Single merchants employ 160 clerks, 
while thousands of those who are forced into our cities and seek to obtain 
a living by trade are ruined. Opera singers receive large salaries paid by 
the contributions of men whose shirts are made by women whose wages 
scarcely enable them to live. 

The whole system of trade, as at present conducted, and as it must con- 
tinue to be conducted if the colonial system be permitted longer to exist, is 
one of mere gambling, and of all qualities, that which most distinguishes 
the gambler is ignorant selfishness. He ruins his friends and wastes his win- 
nings on a running-horse, or on a prostitute. To what extent this has been 
the characteristic of the men who have figured most largely in the walks of 
commerce, might be determined by those who are familiar with the concerns 
of many of the persons described in the following passage, which I take from 
one of the journals of the day : 

" The great merchants of this great mercantile city, who were looked up to with reve- 
rence by the mammon-worshipping crowd twenty years ago — where are they? Ask Ste- 
phen Whitney and those few who have with him survived the shock of thirty years' 
changes, and they will tell you, in commercial language, that 93 or 95 per cent, of their con- 
temporaries at that date have since become bankrupt, and that the widows of most of those 
deceased are either « keeping boarding-houses'" or have left friendless orphans to "the ten- 
der mercies" of a commercial world. 

u Look at the ephemeral creatures of this and last year's accidents, who now figure largely 
in the great world of New York, whether in the wholesale or retail line — whether in 
commerce, fashion, theatricals or religion — and ask where and what they or their children 
are likely to be twenty-years hence. The answer will be such as none of those most 
deeply in it will be apt to give with precise or probable correctness. ' They shall heap up 
riches and know not who shall gather them ;* ' they shall build houses and know not who 
shall inhabit them;' 'they shall plant vineyards and shall not eat the fruit of them;" 
they shall 'call their lands after their own names,' and a generation shall rise up and 
possess them who shall laugh those names into a contempt from which the oblivion that 
shall succeed will seem a happy deliverance.*' — N. Y. Herald. 



who are now most desperate gamblers and drunkards." — Extract from a letter dated San 
Francisco, July 30. 

" American Lottery — Class No. 1 — $10,000 in actual prizes, sixty-six numbers, twelve 
drawn ballots. Whole tickets, $10 ; half do. $5. This lottery will be drawn at the 
Public Institute in San Francisco, on the third day of October, : 49, at twelve o'clock, M., 
under the superintendence of the managers." — Pacific News. 



208 



THE HARMONY OF INTERESTS. 



As a necessary consequence of the system, money becomes more and more 
an object of consideration in the contraction of the important engagement 
of matrimony, and marriage settlements begin to appear among us. The 
newspapers of the day inform us of the recent execution of one for $200,000. 

If we look westward, it is the same. Centralization produces depopula- 
tion, and that is followed by poverty and crime. London grows upon the 
system that ruins India and fills it with bands of plunderers. The West and 
South-west are filled with gamblers, and land-pirates abound. The late war 
has brought into existence a new species of fraud, in the counterfeiting of 
land-warrants, and this is but one of the many evils resulting from that 
measure. 

If we look back but a few years, we may see that the period between 
1835 and 1843 was remarkable for the existence of crime, and it was that 
one in which the tendency to dispersion most existed. If we now look to the 
period between 1843 and 1847, we can see that there was a gradual tendency 
to the restoration of order and quiet and morality throughout the Union. 
In the last year, we may see the reverse. It was marked by turnouts, insub- 
ordination and violence of various kinds in country and in city. Such 
is the direct consequence of a diminution in the productiveness of labour. 
The employer must pay less, and the employed is unwilling to receive less 
than that to which he has been accustomed. 

The tendency of the colonial system is to increase the number of wagons 
and wagoners, ships and sailors, merchants and traders, the men who neces- 
sarily spend much time in hotels and taverns, living by exchanging the pro- 
ducts of others. The tendency of protection is to increase the number of pro- 
ducers — of the class that lives at home, surrounded by wives, children, and 
friends. The one builds up the city at the expense of the country ; the 
other causes both to grow together. 

Cities are rivals for trade, and when the farmer desires a new road to mar- 
ket he is opposed, lest it should enable him to go more cheaply to Charles- 
ton than Savannah; to New York more readily than to Philadelphia. London 
is jealous of Liverpool, and Liverpool of London. Discord is everywhere, 
and the smaller the amount of production, the greater must it necessarily be. 
Protection seeks to increase production, and thus establish 'harmony. 

It is asserted that protection tends to increase smuggling, and therefore to 
deteriorate morals. To determine this question, it would be required only to 
ascertain what description of men transact business at our custom-houses. 
From 1830 to 1834, the chief part was done by men who had homes occu- 
pied by wives and families, for whose sake reputation was dear, but from 1835 
to 1842, it passed almost entirely into- the hands of men who lived in hotels 
and boarding-houses, and who had neither wives nor families to maintain. 
From 1843 to 1847, it went back to the former class. It has now returned al- 
most entirely into the hands of agents — men whose business is trade, and who 
swear to a false invoice for a commission. The honest man, who desires to 
perform his duties to his wife and children, to society, to his country, and to 
his Creator, cannot import foreign merchandise. The system is a premium 
on immorality and fraud. 

The object of protection is the establishment of perfect free trade, by the 
annexation of men and of nations. Every man brought here increases the 
domain of free trade, and diminishes the necessity for custom-houses. Every 
man brought here consumes four, six, ten, or twelve pounds of cotton for one 
that he could consume at home, and every one is a customer to the farmer 
for bushels instead of gills. Between the honest and intelligent man who 
desires to see the establishment of real free-trade, the Christian who desires to see 
an improvement in the standard of morality, the planter who desires an in- 



THE HARMONY OF INTERESTS. 



209 



creased market for his cotton, the farmer who desires larger returns to his 
labour, the landowner who desires to see an increase in the value of his 
land, and the labourer who desires to sell his labour at the highest price, 
there is perfect harmony of interest. 

CHAPTER TWENTY-SECOND. 
HOW PROTECTION AFFECTS INTELLECTUAL CONDITION. 

The higher the degree of intellect applied to the work of production, the 
larger will be the return to labour, and the more rapid will be the accumu- 
lation of capital. If protection be " a war upon labour and capital/' it must 
tend to prevent the growth of intellect. 

The more men are enabled to combine their efforts, and the greater the 
tendency to association, the larger is the return to labour, and the more 
readily can they obtain books and newspapers for themselves, and schools for 
their children. The object of the monopoly system is that of compelling 
men to scatter themselves over large surfaces, and into distant colonies, and 
thus to diminish the power of obtaining books, newspapers and schools. 
Ihe object of protection is the correction of this error, and to enable men to 
combine their efforts for mental as well as physical improvement. 

The greater the tendency to association, the greater is the facility for the 
dissemination of new ideas in regard to modes of thought or action, and for 
obtaining aid in carrying them into practical effect. The object of the English 
monopoly system is that of separating men from each other, and depriving 
them of this advantage. The object of protection is to enable them to come 
together, and being so, it would seem to be the real friend to both labourer 
and capitalist. 

If we look throughout the world we shall see intellect increasing as men 
live more and more in communion with each other, and diminishing as they 
are compelled to separate. The man who is distant from market spends 
much of his time in taverns, where he obtains little tending to the improve- 
ment of mind or morals. The man who has a market at his door, may obtain 
books and newspapers, and he is surrounded by skilful farmers, from whom 
he obtains information. Not being compelled to spend his time on the road, 
he is enabled to give both time and mind to the improvement of his land, to 
which he returns the refuse in the form of manure, and thus it is that he 
himself grows rich. 

Of all the pursuits of man, agriculture — the work of production — is the 
one that most tends to the expansion of intellect. It is the great pursuit of 
man. There is none " in which so many of the laws of nature must be con- 
sulted and understood as in the cultivation of the earth. Every change of 
the season, every change even of the winds, every fall of rain, must affect 
some of the manifold operations of the farmer. In the improvement of our 
various domestic animals, some of the most abstruse principles of physiology 
must be consulted. Is it to be supposed that men thus called upon to study, 
or to observe the laws of nature, and labour in conjunction with its powers, 
require less of the light of the highest science than the merchant or the 
manufacturer?"* It is not. It is the science that requires the greatest 
knowledge, and the one that pays best for it : and yet England has driven 
man, and wealth, and mind, into the less profitable pursuits of fashioning 
and exchanging the products of other lands : and has expended thousands of 
millions on fleets and armies to enable her to drive with foreign nations the 
poor trade, when her own soil offered her the richer one that tends to produce 

* Wadsworth's Address to the New York Agricultural Society 

27 



210 



THE HARMONY OF INTERESTS. 



that increase of wealth and concentration of population which have in all 
times and in all ages given the self-protective power that requires neither 
fleets, nor armies, nor tax-gatherers. In her efforts to force this trade, she 
has driven the people of the United States to extend themselves over vast 
tracts of inferior land when they might more advantageously have concen- 
trated themselves on rich ones : and she has thus delayed the progress of 
civilization abroad and at home. She has made it necessary for the people 
of grain-growing countries to rejoice in the deficiencies of her harvests, as 
affording them the outlet for surplus food that they could not consume, and 
that was sometimes abandoned on the field as not worth the cost of har- 
vesting; instead of being enabled to rejoice in the knowledge that others 
were likely to be fed as abundantly as themselves. Her internal system was 
unsound, and her wealth gave her power to make that unsoundness a cause 
of disturbance to the world ; and hence she has appeared to be everywhere 
regarded as a sort of common enemy. 

To this unsound system we are indebted for the very unsound ideas that 
exist in regard to the division of labour. Men are crowded into large towns 
and cities, to labour in great shops, where the only idea ever acquired is the 
pointing of a needle, and that is acquired at the cost of health and life. Thfc 
necessary consequence is the general inferiority of physical, moral, and 
mental condition, that is observable in all classes of English workmen. 

Of all machines, the most costly to produce is Man, and yet the duration 
of this expensive and beautiful machine is reduced to an average of twenty- 
five or thirty years, under the vain idea that by so doing pins and needles 
may be obtained at less cost of labour. The principle is the same that is 
said to govern the planter of Cuba when he stocks his estate exclusively with 
males, deeming it cheaper to buy slaves than to raise them. As a necessary 
consequence, the duration of life is there short, and so is it in the crowded facto- 
ries of the great workshop of the world." The idea is vain. Pins and 
needles would be obtained at far less cost of labour were the workshops of 
Sheffield and of Birmingham scattered throughout the kingdom, thereby 
enabling the producers of pins to take their places by the side of the producers 
of food, and enabling all to enjoy the pure air and pure water of the village, 
instead of being compelled, after breathing the foul atmosphere of the work- 
shop during the day, to retire at night to rest in the filthy cellar of the un- 
drained street. Were the ore of Ireland converted into axes and railroad 
bars by aid of the coal and the labour of Ireland, the cellars of Manchester 
and Birmingham would not be filled with starving Irishmen, flying by hun- 
dreds of thousands from pestilence' and famine, and compelling the labourers 
of England to fly to the United States, Canada, or Australia. 

The English school of political economy treats man as a mere machine, 
placed on the earth for the purpose of producing food, cloth, iron, pins, or 
needles, and takes no account of him as a being capable of intellectual and 
moral improvement. It looks for physical power in connection with igno- 
rance and immorality, and the result is disappointment.* The* workman of 



* The commissioners for inquiring into the state of education in Wales, describe a state 
of mental condition perfectly in keeping with the following account of their physical con- 
dition : — "The houses and cottages of the people are wretchedly bad, and akin to Irish 
hovels. Brick chimneys are very unusual in these cottages ; those which exist are usually 
in the shape of large coves, the top being of basket-work. In few cottages is there more 
than one room, which serves for the purpose of living and sleeping." Hence it is that 
there is so universal a want of chastity, resulting, say the commissioners, " from the re- 
volting habit of herding married and unmarried people of both sexes, often unconnected 
by relationship, in the same sleeping rooms, and often in adjoining beds, without partition 
or curtain." [See Westminster Review, dfa !trVL] 



THE HARMONY OF INTERESTS. 



211 



this country is infinitely the superior of the workman of Manchester, aud the 
reason is, that he is not treated as a mere machine. The object of what 
is called free trade is to degrade the one to the level of the other. The object 
of protection is that of enabling the poor artisan of Manchester or Leeds, 
Birmingham or Sheffield, to transfer himself to a country in which he will 
not be so treated, and in which he may have books and newspapers, and his 
children may be educated. 

The colonial system involves an expenditure for ships of war, soldiers, and 
sailors, greater than would be required for giving to every child in the king- 
dom an education of the highest order ; and those ships and men are sup- 
ported out of the proceeds of taxes paid by poor mechanics and agricultural 
labourers, whose children grow up destitute even of the knowledge that 
there is a God. The object of protection is to do away with the necessity 
for such ships and men, and to raise the value of labour to such a point as 
will enable the people of England to provide schools for themselves. 

In the colonies, the perpetual exhaustion of the land and its owner has for- 
bidden, as it now forbids, the idea of intellectual improvement. To the West 
Indies no Englishmen went to remain. The plantations were managed by 
agents, and the poor blacks, under their agency, died so fast as to ren- 
der necessary an annual importation merely to keep up the number. In 
India, where education was from the earliest period an object of interest 
to the government, and where every well-regulated village had its public 
school and its schoolmaster, in which information was so well and so 
cheaply taught as to furnish the idea of the Lancaster system, it has almost 
disappeared. In the thana of Nattore, containing 184,509 inhabitants, there 
were, a few years since, but 27 schools, with 262 scholars. The teachers 
were simple-minded and ignorant, with salaries of $2-50 per month, and the 
scholars were without books. The number who could read and write was 
6000. Such was the state of education in one of the best portions of 
Bengal. In the Bombay presidency, with a population of six and a half 
millions, there were 25 government schools, with 1315 scholars, and 1680 
village schools, with 33,838 scholars. In the Madras presidency, out of 13 
millions, there were 355,000 male and 8000 female scholars, and the in- 
struction was of the worst kind. 

In Upper Canada, in 1848, the number of children, male and female, 
under fourteen years of age, was 326,050, of whom but 80,461 attended 
school.* So far the state of things is better than in other colonies j but when 
we come to look further, the difference is not very great. The intellect of man 
is to be quickened by communion with his fellow-man, of which there can 
be but little where the loom is widely distant from the plough, and men are 
distant from each other, all engaged in the single pursuit of agriculture. 
How slow has been the growth of concentration in that province, may be 
seen from the following facts. Numerous small woollen mills furnish 584,008 
yards of flannel and other inferior cloths, working up the produce of perhaps 
250,000 sheep. Fulling mills exist, at which about 2,000,000 pounds of 
woollen cloths of household manufacture are fulled. Further, there are — 

1 rope-walk. 11 pail factories. 1 ship-yard. 1 vinegar factory. 

1 candle factory. 1 last factory. 1 trip hammer. 5 chair factories. 

1 cement mill. 4 oil mills. 2 paper mills, making 2 brick-yards. 

1 sal-eratus factory. 3 tobacco factories. 1900 reams each. 1 axe factory, produc- 

8 soap factories. 2 steam-engine facto- 3 potteries. ing 5000 per annum. 

3 nail factories. ries. 1 comb factory. 6 plaster mills, f 

And these constitute the whole of the manufacturing establishments of 



* Appendix to first Report of Board of Registration. 



f Ibid. 



212 



THE HARMONY OF INTERESTS. 



that great district of country, much of it so long settled. There is. conse- 
quently, little or no employment for mind, and - the consequence is, that all 
who desire to engage in other pursuits than those of agriculture fly to the 
South. There are now within the Union, it is said, not less than 200,000 
Canadians, and with every day the tendency to emigration increases.* If we 
look to Nova Scotia and New Brunswick, it is the same. There is there 
no demand for intellect, and any man possessing it flies southward. Forty 
years since it was asked, " Who reads an American book V 9 That question 
has long since been answered ; but it may now be repeated in reference to 
all the British provinces. Who reads a Canadian, a Nova-Scotian, or a New 
Brunswick book ? Upper Canada has two paper-mills capable of producing 
about ten reams of paper per day, being, perhaps, a tenth of what is re- 
quired to supply the newspapers of Cincinnati. Forty years since, the ques- 
tion might have been asked, Who uses an American machine ?" and yet the 
machine shops of Austria and Russia are now directed by our countrymen, 
and the latest improvements in machinery for the conversion of wool into 
cloth are of American invention. The British provinces have had the ad- 
vantage of perfect free trade with England, the consequence of which is, 
that they are almost destitute of paper-mills and printing-offices, and machine 
shops are unknown, while the Union has been a, prey to the protective sys- 
tem, that " war upon labour and capital," the consequence of which is, that 
paper-mills and printing-offices abound to an extent unknown in the world, 
and almost equal in number and power to those of the whole world,f and 
machine shops exist almost everywhere. These differences are not due to 
any difference in the abundance or quality of land, for that of Upper Canada 
is yet to a great extent unoccupied, and is in quality inferior to none on the 
continent. They are not due to difference in other natural advantages, for 
New Brunswick has every advantage possessed by Maine and New Hamp- 
shire, and Nova Scotia has coal and iron ore more advantageously situated 
than any in the Union. They are not due to difference of taxation, for 
Great Britain has paid almost all the expenses of government. To what, 
then, can they be attributed, but to the fact that those provinces have been 
subject to the monopoly system, and compelled to waste their own labour 
while giving their products in exchange for the services of English men, wo- 
men, and children, employed in doing for them what they could have better 
done themselves, and losing four-fifths of their products in the transit between 
the producer and the consumer ? Place the colony within the Union — give 
it protection — and in a dozan years its paper-mills and its printing-offices 
will become numerous, and many will then read Canadian books. 

In England, a large portion of the people can neither read nor write, and 
there is scarcely an effort to give them education. The colonial system looks 
to low wages, necessarily followed by an inability to devote time to intel- 
lectual improvement. Protection looks to the high wages that enable the 
labourer to improve his mind, and educate his children. The English 
child, transferred to this country, becomes an educated and responsible being. 
If he remain at home, he remains in brutish ignorance. To increase the 

* " I do not exaggerate when I say that there are no less than 200,000 Canadians in the 
United States ; and, unless efficacious means are taken to stop this frightful emigration, 
before ten years two hundred thousand more of our compatriots will have carried to the 
American Union their arms, their intelligence, and their hearts." — Letter of Rev. drthvr 
Chiniquy. 

•j" The whole quantity of paper required to supply the newspaper press of Great Britain 
and Ireland is 170,000 reams; while that required for the supply of four papers printed 
in New York, Philadelphia, and Baltimore, is about 110,000. and the whole number of 
newspapers is about 2400. 



THE HARMONY OF INTERESTS. 



213 



productiveness of labour, education is necessary. Protection tends to the 
diffusion of education, and the elevation of the condition of the labourer. 

At no period of our history has the demand for books and pictures, or the 
compensation of authors or artists, been less than in the period of 1842-43 
At none have they grown so rapidly as from 1844 to 1847. They now tend 
downward, notwithstanding a demand that is still maintained by the power 
that yet exists of obtaining merchandise in exchange for certificates of debt. 
When that shall pass away, we shall see a recurrence of the events of tke 
free trade period. 

If we desire to raise the intellectual standard of man throughout the world, 
our object can be accomplished only by raising the value of man, as a ma- 
chine, throughout the world. Every man brought here is raised, and every 
man so brought tends to diminish the supposed surplus of men elsewhere. 
Men come when the reward of labour is high, as they did between 1844 and 
1848. They return disappointed when the reward of labour is small, as is 
now the case. Protection tends to increase the reward of labour, and to im- 
prove the intellectual condition of man. 

CHAPTER TWENTY-THIRD. 
HOW PROTECTION AFFECTS THE POLITICAL CONDITION OF MAN. 

The larger the return to labour, the greater will be the power to accumu- 
late capital. The larger the proportion which capital seeking to be employed 
bears to the labourers who are to employ it, the larger will be the wages of 
labour, the greater the power of the labourer to accumulate for himself, and 
the more perfect will be his control over the disposition of his labour and the 
application of its proceeds, whether to private or to public purposes. 

The freeman chooses his employer, sells his labour, and disposes of the 
proceeds at his pleasure. The slave does none of these things. His master 
takes the produce of his labour, and returns him such portion as suits his 
pleasure. 

Throughout the world, and in all ages, freedom has advanced with every 
increase in the ratio of wealth to population. When the people of England 
were poor, they were enslaved, but with growing wealth they have become 
more free. So has it been in Belgium and in France. So is it now in 
Russia and Germany, and so must it everywhere be. India is poor, and the 
many are slaves to the few. So is it in Ireland. Freedom is there unknown. 
The poor Irishman, limited to the labours of agriculture, desires a bit of 
land, and he gives the chief part of the product of his year's labour for 
permission to starve upon the balance, happy to be permitted to remain on 
payment of this enormous rent. He is the slave of the land-owner, without 
even the slave's right to claim of him support in case of sickness, or if, es- 
caping from famine, he should survive to an age that deprives him of the 
power of labouring for his support. England employs fleets, paid for out of 
taxes imposed on starving Irishmen, to prevent the people of Brazil from 
buying black men, and women, and children, on the coast of Africa, while 
holding herself ready to give white men, and women, and children, to any 
who will carry them from her shores, and even to add thereto a portion of 
the cost of their transportation ; and this she does without requiring the 
transporter to produce even the slightest evidence that they have been 
delivered at their destined port in " good order and well-condition ed." 
When Ireland shall become rich, labour will become valuable, and man wiil 
become free. When Italy was filled with prosperous communities, labour 
was productive, and it was in demand ; and then men who had it to sell 
fixed the price at which it should be sold. With growing poverty, labour 



214 THE HARMONY OF INTERESTS. 



ceased to be in demand, and the buyer fixed the price. The labourer then 
became a slave. If we follow the history of Tuscany, we can find men 
becoming enslaved as poverty succeeded wealth • and again may we trace 
them becoming more and more free, as wealth has grown with continued 
peace. So has it been in Egypt, and Sicily, and Spain. Everywhere 
poverty, or a deficiency of those aids to labour which constitute wealth, is, 
and has invariably been, the companion of slavery ; and everywhere wealth, 
or an abundance of ploughs, and harrows, and horses, and cows, and oxen, 
and cultivated lands, and houses, and mills, is, and has invariably been the 
companion, and the cause, of freedom. 

If protection be a " war upon labour and capital," it must tend to prevent 
the growth of wealth, and thus to deferiorate the political condition of man. 

The farmer who exchanges his food with the man who produces iron by 
means of horses, wagons, canal-boats, merchants, ships, and sailors, gives 
much food for little iron. The iron man, who exchanges his products for 
food through the instrumentality of the same machinery, gives much iron for 
little food. The chief part of the product is swallowed up by the men who 
stand between, and grow rich while the producers remain poor. The growth 
of wealth is thus prevented, and inequality of political condition is maintained. 

The farmer who exchanges directly with the producer of iron gives labour 
for labour. Both thus grow rich, because the class that desires to stand be- 
tween has no opportunity of enriching themselves at their expense. Equality 
3f condition is thus promoted. 

The object of protection is that of bringing the consumer of food to take 
his place by the side of the producer of food, and thus promoting the growth 
of wealth and the improvement of political condition. That it does produce 
that effect, is obvious from the fact that, in periods of protection, such vast 
numbers seek our shores, and that immigration becomes stationary, or 
diminishes, with every approach towards that system which is usually deno- 
minated free trade. 

The colonial system is based upon cheap labour. Protection seeks to in- 
crease the reward of labour. The one fills factories with children of tender 
years, and expels men to Canada and Australia ) the other unites the men 
and sends the children to school. 

The Irishman at home is a slave. He prays for permission to remain and 
pay in pounds sterling for quarters of acres, and his request is refused. 
Transfer him here and he becomes a freeman, choosing his employer and 
fixing the price of his labour. The Highlander is a slave that would gladly 
remain at home : but he is expelled to make room for sheep. One-ninth of 
:he population of England are slaves to the parish beadle, eating the bread of 
enforced charity, and a large portion of the remaining eight-ninths are slaves 
to the policy which produces a constant recurrence of chills and fevers — over- 
work at small wages at one time, and no work at any wages at another. 
Transfer them here and they become freemen, selecting their employers and 
fixing the hours and the reward of labour. The Hindoo is a slave. His 
landlord's officers fix the quantity of land that he must cultivate, and the 
rent he must pay. He is not allowed, on payment even of the high survey 
assessment fixed on each field, to cultivate only those fields to which he gives 
the preference ; his task is assigned to him, and he is constrained to occupy 
all such fields as are allotted to him by the revenue officers, and whether he 
cultivates them or not, he is saddled with the rent of all. If driven by 
these oppressions to fly and seek a subsistence elsewhere, he is followed 
wherever he goes and oppressed at discretion, or deprived of the advantages 
he might expect from a change of residence. If he work for wages, he is 
paid in money when grain is high, and in grain when it is low. He, there- 



THE HARMONY OF INTERESTS. 



215 



fore, has no power to determine the price of his labour. Could he be trans- 
ferred here, he would be found an efficient labaurer, and would consume more 
cotton in a week than he now does in a year, and by the change his political 
condition would be greatly improved. 

Protection looks to the improvement of the political condition of the human 
race. To accomplish that object, it is needed that the value of man be raised, 
and that men should everywhere be placed in a condition to sell their labour 
to the highest bidder — to the man who will give in return the largest quan- 
tity of food, clothing, shelter, and other of the comf jrts of life. To enable 
the Hindoo to sell his labour and to fix its price, it is necessary to raise the 
price of his chief product, cottoD. That is to be done by increasing the 
consumption, and that object is to be attained by diminishing the waste of 
labour attendant upon its transit between the producer and the consumer. 
Fill this country with furnaces and mills, and railroads will be made in 
every direction, and the consumption of cotton will speedily rise to twenty 
pounds per head, while millions of European labourers, mechanics, farmers, 
and capitalists will cross the Atlantic, and every million will be a customer 
for one-fourth as much as was consumed by the people of Great Britain 
and Ireland in 1847. The harmony of the interests of the cotton-growers 
throughout the world is perfect, and all the discord comes from the power of 
the exchangers to produce apparent discord. 

It is asserted, however, that protection tends to build up a body of capi- 
talists at the expense of the consumer, and thus produce inequality of condi- 
tion. That such is the effect of inadequate protection is not to be doubted. 
So long as we continue under a necessity for seeking in England a market, for 
our surplus products, her markets will fix the price for the world, and so kmg 
as we shall continue to be under a necessity for seeking there a small supply 
of cloth or iron, so long will the prices in her markets fix the price of all, 
and the domestic producer of cloth and iron will profit by the difference of 
freight both out and home. With this profit he takes the risk of ruin, which 
is of, perpetual occurrence among the men of small capitals. Those who are 
already wealthy have but to stop their furnaces or mills until prices rise, and 
then tney have the markets to themselves, for their poorer competitors have 
been ruined. Such is the history of many of the large fortunes accumulated 
by the manufacture of cloth and iron in this country, and such the almost 
universal history of every effort to establish manufactures south and west 
of New England. 

Inadequate and uncertain protection benefits the farmer and planter little, 
while the uncertainty attending it tends to make the rich richer and the poor 
poorer, thus producing social and political inequality. 

Adequato and certain protection, on the contrary, tends to the production 
of equality — first, because by its aid the necessity for depending on foreign 
markets for the sale of 0!ir products, or the supply of our wants, will bo 
brought to an end, and thenceforth the prices, being fixed at home, will be 
steady, and then the smaller capitalist will be enabled to maintain competi- 
tion with the larger one, with great advantage to the consumers — farmers, 
planters, and labourers ; and, second, because its benefits will be, as they 
always have been, felt chiefly by the many with whom the price of labour 
constitutes the sole fund out of which they are to be maintained. 

If we take the labour that is employed in the factories of the country, from 
one extremity to the other, it will be found that nearly the whole of it would 
be waste, if not so employed. If we take that which is employed in getting 
out the timber and the stone for building factories and furnaces, it will be 
found that a large portion of it would otherwise be waste. If we inquire 
into the operations of the farmer ; we find that the vicinity of a factory, or 



216 



THE HARMONY OF INTERESTS. 



furnace, enables him to save much of the labour of transportation, and to sell 
many things that would otherwise be waste. Thus far, the advantage would 
seem to be all on the side of the employed, and not on that of the employer. 

Let us now suppose that all protection were abolished, and that perfect 
freedom of trade were established, and that the result were, as it inevitably 
would be, to close every factory, furnace, rolling mill, and, coal-mine in the 
country, and see what would be the result. The owners of such property 
would lose a few millions of dollars of rents, or profits, but the s^nply of 
fuel would be less by three millions of tons, that of iron would be less by 
eight hundred thousand tons, and that of cotton cloth would be less by almost 
a thousand millions of yards. The demand for the labour now employed in 
the production of those commodities would be at an end, and the spare-labour 
of men, and women, and children, and wagons, and horses, and the various 
things now used in and about factories and furnaces, would then be wasted, 
coal and iron and cloth would be doubled in price, and labour would be di- 
minished in a corresponding degree. The power to import iron, or coal, 
or cloth, would not be increased by a single ton, or yard, and the peorje 
would be compelled to dispense with necessaries of life that are now readily 
obtained. The capitalists, whose means were locked up in factories or fur- 
naces, would suffer some loss; but the mass of persons possessed of dis- 
engaged capital, and the receivers of State dividends, would be able to com- 
mand, for the same reward, a much larger quantity of labour than before. 

The object of protection is that of securing a demand for labour, and its 
tendency is to produce equality of condition. The jealousy of " overgrown 
capitalists' ' has caused many changes of policy ; but, so far as they have 
tended to the abolition of protection, they have invariably tended to the 
production of inequality. The wealthy capitalist suffers some loss ; but he 
is not ruined. A change takes place, and he is ready to avail himself of it, 
and at once regains all that had been lost, with vast increase. The small 
capitalist has been swept away, and his mill is in a state of ruin. By the 
time he can prepare himself to recommence his business, the chance being 
past, he is swept away again, and perhaps for the last time. 

For months past, the rate of interest cm a certain species of securities has 
been very low. The wealthy man could borrow at four per cent. ; the poor 
man, requiring a small loan on a second-rate security, could scarcely obtain 
it at any price. The man who has coal to sell, or iron to sell, must have the 
aid of middlemen to act as endorsers upon the paper received from his cus- 
tomers, and their commissions absorb the profits. The wages of the miner 
have been greatly reduced, while the profits of the speculator have been 
increased. The reason of all this is, that, throughout the nation, there pre- 
vails no confidence in the future. It is seen that we are consuming more 
than we produce ; that our exports do not pay for our imports ) that we are 
running in debt ; that furnaces and mills are being closed ; and every one 
knows what must be the end of such a system. He-enact the tariff of 1842, 
and the trade of the middleman would be at an end, because confidence in 
the future would be felt from one extremity of the land to the other. Should 
we not find in this some evidence of the soundness of the principle upon which 
it was based ? The system which gives confidence must be right ; that which 
destroys it must be wrong. 

Confidence in the future — Hope — gives power to individuals and commu- 
nities. It is that which enables the poor man to become rich, and the cha- 
racter of all legislative action is to be judged by its greater or less tend- 
ency to produce this effect. A review cf the measures urged upon the nation 
by the advocates of the system miscalled free trade, shows, almost without 
an exception, they have tended to the destruction of confidence, and there- 



THE HARMONY OF INTERESTS. 



217 



fore to the production of the political revolutions referred to in the first 
chapter. 

The direct effect of the insecurity that has existed has been to oentralize 
the business of manufacture in one part of the Union and in the hands of a 
comparatively limited number of persons — such as could afford to take large 
risks, in hope of realizing large profits. Had the tariff of 1828 been made 
the settled law of the land, the Middle and Southern States would now be 
studded with factories and furnaces, and while the North and East would not 
have been less rich, they would be far richer, and the present inequality of 
coLdition would not now exist. 

The power of the North, as compared with that of the South, is due to 
the jealousy of the former entertained by the latter, which has prevented the 
establishment of a decided system, having for its object the destruction of 
the English monopoly, and the ultimate establishment of perfect freedom of 
trade. 

The object of the colonial system was that of taxing the world for the 
maintenance of a great mercantile, manufacturing, and landed aristocracy, and 
the mode of accomplishment was that of securing a monopoly of machinery. 
The object of protection is to break down that monopoly, and with it the 
aristocracy that collects for the people of Great Britain and the world those 
immense taxes, to be appropriated to the payment of fleets and armies 
officered by younger sons, and kept on foot for the maintenance of the exist- 
ing inequality in Great Britain, Ireland, and India. All, therefore, who 
desire to see improvement in the political condition of the people of the 
world should advocate the system which tends to break down monopoly and 
establish perfect freedom of trade. 

CHAPTER TWENTY-FOURTH. 
HOW PROTECTION AFFECTS CREDIT INDIVIDUAL AND NATIONAL. 

The existence of credit is evidence of the existence of confidence that the 
man who desires to obtain for a time the use of property intends to return it. 
The more universal this confidence, the more readily can the capitalist place 
his funds, and the larger will be the return. The more universal it is, the 
more readily can the labourer obtain the necessary aids to labour, and the 
more productive will be that labour. If protection be " a war upon labour 
and capital/ ' it must tend to destroy the confidence of man in his fellow- 
man. 

The object of protection is that of bringing the consumer to take his place 
by the side of the producer, exchanging labour for labour, and thus diminish- 
ing the necessity for credit. Its effect is to diminish the machine ry of ex- 
change, and thus to increase the productiveness of labour, and with it the 
power to obtain credit. 

The object of the monopoly system is that of separating the consumer 
from the producer, and compelling both to repose confidence in distant men, 
thus increasing the necessity for credit. Its effect is that of increasing the 
machinery of exchange, and diminishing the productiveness of labour, and 
thus diminishing the power to obtain credit. 

That such is its effect in the colonies of Great Britain, we know. In 
India, once so wealthy, the ordinary rate of interest is twelve per cent. ; but 
the poor cultivator borrows seed at the rate of one hundred per cent. Credit 
there has no existence, and yet almost the whole exchanges of the country are 
made at a distance of many thousands of miles, by men in whom the con 
Burner and producer are compelled to repose confidence. 

In the West Indies, credit has almost entirely disappeared. In Canada, 

28 



218 



THE HARMONY OF INTERESTS. 



even the government cannot effect loans without a guaranty from parlia- 
ment. -So is it throughout the whole range of colonies. 

At home, capital is cheap, because of the want of general confidence. The 
capitalist takes two per cent. ; but the labourer could not borrow at thirty 
per cent. The capitalist that owns machinery is enabled to dictate the terms 
upon which it shall be used by those who work. Sometimes he employs many 
work-people. At others few. Sometimes he works long time, and at others 
short time. At all times his people obtain but a small proportion of the 
products of labour ; but at many times they obtain but a very small propor- 
tion, while at others they are unable to obtain the use of machinery at any 
price. 

Abroad, the credit of English merchants is falling daily. But recently, 
there were in the great city of Liverpool, scarcely half a dozen houses that 
could be trusted with a cargo of cotton. Such are the effects of the system 
in which " Commerce is king/' and the consumer and the producer are placed 
at the mercy of the exchanger. 

At no period in this country did confidence grow more rapidly than in the 
period between 1830 and 1834. At none did it decline with such rapidity 
as between 1835 and 1842. With the action of the tariff of 1842, it was 
restored, but with that of 1846 it again declines. There is no demand for 
capital, and it is cheap. There is little demand for labour, and it too is 
cheap. 

Never, probably, since the settlement of the country, did the poor man 
find so much difficulty in obtaining the aid of capital, as in 1842, the period 
of free trade. Never has he found it more easy than between 1844 and 
1847. The period of distrust has again arrived. Money is said to be 
abundant, but the security must be undoubted, and the poor man pays two 
per cent, a month for the use of capital that the rich man cannot invest to 
produce him more than four per cent, per annum. There is no confidence 
existing. 

" Notwithstanding the cheapness and abundance of money," says the New 
York Herald, " no one seems disposed to touch any thing in the way of 
speculation, and capitalists prefer loaning money at four per cent, interest, 
on good security, to purchasing stocks at present prices. They say that when 
they lend money on first-rate security, at a low rate of interest, they are sure 
of the principal and a small amount of interest, when they want it." 

The re-establishment of the tariff of 1842 would restore confidence, and 
produce a demand for labour, and wages would rise — and a demand for 
capital, the price of which would also rise, and thus it would appear that in 
protection is to be found the harmony of interest between the labourer and 
the capitalist. 

NATIONAL CREDIT. 

From 1830 to 1835, the national credit grew, for we paid for what we 
imported. From 1835 to 1840, credit declined, for we ran largely in debt for 
cloth and iron, for which our exports could not pay. In 1842, national credit 
disappeared, for we were unable to pay even the interest on our debts. From 
1843 to 1848, national credit grew, for we paid interest and commenced the 
reduction of the debt. In the last two years we have gone largely in debt, and 
must now either diminish our imports or run further into debt. 

How long we can continue to do this, does not depend upon ourselves. 
Any circumstance producing a change in the rate of interest in Europe,, 
would cause our certificates of debt to be returned upon us for payment, and 
what then would be the state of the national credit ? A nation that is largely 
in debt is always in danger of losing its credit. 



THE HARMONY OF INTERESTS. 



219 



CHAPTER TWENTY-FIFTH. 
HOW PROTECTION AFFECTS REVENUE AND EXPENDITURE. 

The more men live and work in connection with each other, the greater is 
their poiver to protect themselves. The more widely they are separated 
from each other, the greater is their necessity for seeking protection from 
others. 

The more they live in connection with each other, the larger will be the 
product of their labour, and the greater will be their power to contribute 
towards the maintenance of peace and order. The less they live in con- 
nection with each other, the less productive will be their labour, and the less 
will be their power to contribute to that object. 

With every increase in the productiveness of labour, the power of self- 
government thus increases, with increased power to contribute towards the 
expenditures incident to the maintenance of government; and with every di- 
minution therein, the power of self-government decreases, with diminished 
power to contribute towards the public revenue required for paying others 
for performing the duties of government. 

If protection be, as is asserted, a " war upon labour and capital," it must 
increase the necessity for government by others, and diminish the power to 
contribute towards its maintenance. 

The object of protection is, however, that of enabling men to live in con- 
nection with each other, the consumer taking his place by the side of the 
producer, each protecting, and protected by, the other. This would seem to 
diminish the necessity for seeking protection from others. Another object of 
protection is that of enabling men to exchange with each other, giving labour 
for labour, without paying so many persons for standing between them. 
This would seem calculated to increase their power to pay for protection, 
should it be needed. , 

The object of the monopoly system — now known by the name of free trade 
— is that of separating the consumer from the producer, and diminishing 
their power to protect each other. Their exchanges are to be always made 
in distant markets, and many wagons, ships, and men are to stand between, 
for the care of which fleets and armies are needed. This would seem to in- 
crease their necessity for protection, while the diminished power of combina- 
tion of action would seem to tend to decrease their power of paying for pro- 
tection. 

How stand the facts ? The question will be answered by placing side by 
side the expenditures under the different systems : — 

Protection. » Free trade. 

Per annum. Per annum. 

1829 to 1834 . $16,800,000 1834 to 1841 . $31,700,000 

1843 to 1845 . 20,700,000 1846 to 1849 . 44,500,000 

The necessity for contributing towards the support of government seems to 
have increased with the approach towards free trade, and to have diminished 
as we approached protection. 

The revenue from customs in the several periods, was as follows : — 

Per head. Per head. 

1830 to 1834 . . $1-75 1835 to 1841 . . 0-84J 

1843 to 1847 . . 1-36 1848-49 . . . 1— 

I exclude here the year 1847-48, because it was an entirely exceptional 
one. AYe had imported a large amount of free goods — specie — in the pre- 
ceding year, and we exported it again in 1847-48*, to exchange for duty- 



220 



THE HARMONY OF INTERESTS. 



paying ones, and the whole amount of duty received upon the goods so ob- 
tained in exchange, should be added to the revenue of 1846-47. 

The power to contribute towards the revenue certainly decreased in the 
years of free trade, and precisely as the necessity for contributions increased. 
The amount actually paid was greater than is here set down, because the 
government collected, between 1834 and 1841, a large amount of duties upon 
goods received in exchange for certificates of debt ; but that was merely a 
payment in advance of production, and the consequence of receiving such 
payment was, that it was nearly bankrupt in 1842, and compelled to borrow 
almost thirty millions to provide for the continuance of its own existence. 

We are now doing the same thing. The amount of debt incurred in the 
last year was not less than twenty-two millions, and upon this the govern- 
ment obtained duties, as before, in advance of production, to the extent of 
almost seven millions. If the power to buy on credit were now to cease, the 
amount collected would fall to twenty-two millions. Were the debt con- 
tracted last year now to be paid, it would fall to fifteen millions, and a large 
addition would have to be made to the public debt, as in 1841-42. How 
long a time is to elapse before such will be the state of things, it is not for 
me to predict ; but if we make this year a further addition of twenty millions 
to our foreign debt, and close as many furnaces as we did in the last one, the 
day for it cannot be far distant. 

The power to contribute towards the maintenance of government depends 
upon the power of production, and every circumstance tending to diminish 
the one tends equally to the diminution of the other. The power of pro- 
duction is now rapidly diminishing, and must continue so to do. 

Such likewise is the case in England. From year to year the payment of 
taxes is becoming more and more onerous, notwithstanding so large a portion 
of them is thrown upon the farmers and planters of the earth, by aid of the 
system under which they are compelled to give more food, cotton, tobacco, 
and sugar, for less and less cloth and iron ; and yet from year to year the 
expenditures have been increasing. Poverty produced rebellion in Ireland, 
and chartism in England, and thus increased the necessity for soldiers and 
sailors. The exhaustion of the older provinces of India led to a desire for 
Affghanistan, Scinde, and the Punjaub; and the failure of a market for 
labour in the form of cotton, dr©ve the Hindoo to opium, which led to a war 
in China, and thus was made a demand for fleets and armies. The poverty 
of Canada led to rebellion, and to the building of forts and ships. The 
anxiety to secure foreign markets has led to immense expenses for steam- 
ships and mail steamers, and thus the more the system tends to fail, the 
greater is the expenditure for its maintenance, and the less the ability of the 
people of England, and the farmers and planters of the world, to contribute 
thereto. 

Let us now look to the other source of our national revenue — the public 
lands. 

The higher the value of labour, the more of it will be brought here for 
Bale. The more people come here, the more land will be required. The 
larger and more valuable the freights homeward, the less will be the cost of 
freight outward, and the more numerous will be the commodities that can 
be exported to pay for those we may choose to import. 

Were we now importing a million of men annually, the sales of land would 
soon reach ten millions of acres per annum. That point we should now reach 
in five years of perfect and fixed protection, and but few more years would 
be required to double both the importation of men and the sales of public 
lands. Here is a vast source of public revenue. 

Perfect protection would, by degrees, diminish the import of cottons, iron, 



THE HARMONY OF INTERESTS. 



221 



and other duty-paying goods, but we should consume treble or quadruple the 
quantity of coffee, tea, and the raw materials for the production of which the 
soil or climate of the country is not suited, and thus should we raise the 
value of labour employed in agriculture throughout the world. 

It is asked, " If we converted all our cotton into cloth, what would Europe 
pro luce to pay us for it V f In answer, it may be said that the object of pro- 
tection is that of enabling the consumer of food to take his place by the side 
of the producer of food, not to separate them. It is to our interest that the 
people of England should supply themselves with clothing made by men who 
cat the food of England, and that such should be the case with those of Ger- 
many and Russia, Spain and Italy, and with every step in their progress they 
would need more cotton. To pay for it, they would employ their labour in the 
production of thousands of articles of taste and luxury, of which we should 
then consume immense quantities, and therewith there would be improvement 
of taste, refinement of feeling, elevation of character, and increase of indi- 
vidual and national strength, of which now we can form no conception. 

Upon such commodities the duties would be moderate, and, as the imports 
of the more bulky of the duty-paying articles diminished, the customs' 
revenue would gradually decline, until at length the necessity for custom-houses 
would pass away, the power to maintain government with the land revenue 
having grown to take its place, and thus might be realized the wonderful 
idea of the government of an immense nation maintained without the neces- 
sity for a single man employed in the collection of taxes. 

It would thus appear that between the interests of the treasury and the 
people, the farmer, planter, manufacturer, and merchant, the great and little 
trader and the shipowner, the slave and his master, the landowners and la- 
bourers of the Union and the world, the free trader and the advocate of 
protection, there is perfect harmony of interests, and that the way to the 
3st!i , :lishment of universal peace and universal free trade, is to be found in 
the adoption of measures tending to the destruction of the monopoly of ma- 
chinery, and the location of the loom and the anvil in the vicinity of the 
plough and the harrow. 

CHAPTER TWENTY-SIXTH. 
HOW PROTECTION AFFECTS THE GOVERNMENT. 

The man whose labour is productive, and whose habits are economical, 
enjoys the confidence of the world; while he whose labour is unproductive, 
and whose habits are wasteful, is looked upon with distrust. With the one, 
each day is marked by an increase of strength ; while with the other it is 
marked by an increase of weakness. 

So is it with communities. The peaceful and industrious grow rich and 
strong. The warlike and wasteful become poor and weak. 

If protection be " a war upon the labour and capital of the world," it must 
tend to cause diminution of wealth and strength, and the monopoly system of 
England must tend to the augmentation of both. 

At no anterior period had the wealth and strength of this country grown 
with the rapidity with which it grew from 1830 to 1835. The nation was at 
peace and all were employed. At no period has decline been so obvious, cr 
the descent more complete than in the period which followed. The nation 
was at war, and production declined until in many departments of industry 
it almost ceased. The name of America became almost a by-word for weak- 
ness and want of faith. In the four succeeding years, the recovery was such 
as to be almost marvellous, and then it was that the power of the nation first 
began to be admitted. That period has been followed by one of war and waste, 



222 



THE HARMONY OF INTERESTS. 



and largely increased expenditure, rendering necessary the collection of large 
revenues, while production is diminishing. The people and the government 
are now living on borrowed money, and how long they can continue to borrow 
is uncertain. The revenue from customs in the year ending in June last 

was $28,436,000 

Of which there was collected on goods purchased with certifi- 
cates of debt . 6,600,000 

To meet the demands of the government for the present year, the whole 
sum of $28,000,000 would be required, and, if we should cease to be able 
to purchase merchandise on credit, the government would be driven again 
to the raising of money by means of loans, and if at the same time the debts 
now being created were sent back upon us for payment, the present year 
might witness a repetition of the troubles of 1841 and 1842. 

During the existence of the tariff of 1842, the government paid its way, 
and therefore it was strong. It is now carried on on credit, and therefore it is 
.becoming weak. To the extent of the foreign debt created, the country has 
eaten and drunk and used that for which it has yet to pay, and the govern- 
ment has had its thirty per cent. ; but a demand for payment would at once 
reduce the imports as much below t"he exports as they now exceed them, and 
the government would find its revenue decreased to the full extent of the 
present excess. 

The contrast presented, on a review of the history of Great Britain and 
this country, is most instructive. Sixty years since, the former was rich and 
populous, while the latter was poor and its population was small and widely 
scattered. In wealth, the Union already exceeds her competitor, and in 
population it will do so at the close of the next decennial period. 

The reason of this is to be found in the fact, that the policy of the one 
has tended to the separation of the consumer from the producer, while that of 
the other has, to some extent, tended towards bringing them together. The 
English system is based upon " ships, colonies, and commerce," and, in carry- 
ing it out, her colonies have been in succession exhausted. Ireland now lies 
prostrate and helpless — a burden upon her hands — an encumbrance rather than 
an advantage. Poverty and distress are coming gradually nearer and nearer 
home, while she is encumbered with an enormous debt, no part of which can 
she pay, and the interest upon which is yet paid only by aid of a series of 
repudiations quite as discreditable as those with which she is accustomed to 
charge upon Mississippi and Florida.* 

The American system is based upon agriculture, the work of production, 
and its object has been that of producing prosperous agriculture, by bringing 
the consumer to take his place by the side of the producer, and thus es- 
tablishing that great commerce which is performed without the aid of ships 
or wagons. By aid of that system the original thirteen States have planted 
numerous colonies, all of which have grown and thriven, giving and receiving 
strength, while those of England, so long the subjects of immense taxation, 
are now everywhere a cause of weakness. All desire to abandon her, while 
all would desire to unite with us, and were they at liberty^ to exercise their 



* The great expansion of the Bank of England in 1839, was followed by the destruc- 
tion of confidence among individuals to so great an extent that the three per cents went 
up to par, and the government availed itself of the opportunity to compel the holders of 
the four and a half per cents to take in exchange new certificates, bearing three and a 
half per cent. Shortly after the threes fell to eighty. The last expansion has brought 
about a similar state of things. Confidence is destroyed, and trade is paralyzed, and the 
threes are again almost at par ; and it is now suggested that a new arrangement may be 
made by which the government may be enabled to repudiate a further portion of the inte- 
rest on the debt. 



THE HARMONY OF INTERESTS, 



223 



inclinations, the sway 'of the Queen of Great Britain would, probably, at the 
close of the present year, be limited to that island alone, with its twenty or 
twenty-two millions of inhabitants. 

The free trade of England consists in the maintenance of monopoly, and 
therefore is it repulsive. The protective system of this country looks to the 
breaking down of monopoly, and the establishment of perfect free trade, and 
therefore is it attractive. 

The one looks to " cheap" labour, and therefore does it expel individuals 
as well as communities. The other looks to raising the value of labour, and 
therefore does it attract both individuals and communities. 

Protection tends to the maintenance of peace, and the increase of wealth 
and power. The colonial system tends to the production of causes of war, 
and the diminution and ultimate destruction of both wealth and power. 

Between the views of those who would desire to see their government 
strong for defending them in the enjoyment of all their rights in relation to 
the other communities of the world, and those of others who desire to see 
the government peacefully and economically administered, there is therefore 
perfect harmony. 

CHAPTER TWENTY-SEVENTH. 
HOW PROTECTION AFFECTS THE NATION. 

The man whose labour is productive, exercises the power of self-govern- 
ment, which increases with every increase in the productiveness of his 
labour. With every diminution in his power of production, he loses more 
and more the power of self-government, and ultimately becomes a slave.* 

So is it with nations. With every increase in the productiveness of their labour, 
they are more enabled to determine for themselves their own course of action, 
uninfluenced by that of surrounding nations. With every diminution therein 5 
they are more and more compelled to shape their course of action by that of 
others, losing the power of self-governmenh 

With the diminished necessity for combination with their neighbours, there 
is an increased power for voluntary combination, (annexation,) tending still 
further to increase the return to labour. With increased necessity for com- 
bination, there is diminished power for voluntary combination, with diminished 
return tx) labour-. 

If protection be "a war upon labour and capital," it must diminish the 
power of voluntary union, and increase the necessity "for uniting our efforts 
with those of distant nations. If the English monopoly system tend to in- 
crease the value of labour and capital, it must tend to increase the power 
of voluntary union, and diminish the necessity for involuntary union. 

Of all the nations of the world, there is, at the present time, not one that 
exercises in a less degree the power of self-government than that of Great 
Britain. For the last thirty years, her policy has been dictated by others. 
The repeal of the laws prohibiting the export of machinery was a matter of 
necessity, and so have been, in succession, all the laws relative to duties on 
imports. The duty on cotton was abolished because other nations had ob- 
tained machinery. Slave-grown cotton was admitted duty free, while slave- 
grown sugar was subjected to heavy duties, because a supply of cotton was 



* "The transition from absolute freedom to a state of slavery is now in progress among 
the Arabs of Mesopotamia, owing to diminished power of obtaining the means of sub- 
sistence by the modes heretofore pursued. The poor and the weak a]e enslaved by 
those who are stronger and more wealthy." — Spectator, March, 1840. 



224 



THE HAKMONY OF INTERESTS. 



matter of necessity. The restrictions on slave-grown sugar were abandoned, 
because the abandonment was necessary. The navigation laws have, step by 
step, been abandoned, as matter of necessity. The corn laws were repealed 
because it was deemed necessary to conciliate the growers of corn into be- 
coming large purchasers of cloth and iron. With each step in her progress, 
pauperism and crime increase, and the necessity for places of banishment 
for criminals increases, and with each there is increased difficulty in finding 
places willing to receive them. Having exhausted Van Diemen's land,* and 
Norfolk Island, the Cape was recently selected for the purpose, but the 
colonists have set an example of successful resistance that will be elsewhere 
followed. Canada is now to be set free, and Ireland is to be retained, neither 
of them of choice, but both as matters of necessity. The nation has lost the 
power of self-government. Its policy is being dictated to it by the other 
nations of the world. The tendency to voluntary union has ceased to exist, 
and each day brings with it new evidence that the dissolution of the British 
empire is at hand. 

If such is the case with the owners of the loom and the anvil, how is it 
with their subjects who hold the plough and follow the harrow ? Ireland 
has no power of self-government. She is a mere machine in the hands of 
those who perform the duties of government. Poor-laws are inflicted upon 
her to such an extent as almost to amount to a confiscation of property, and 
then other laws are passed to authorize commissioners to take possession of, 
and sell, a large portion of the property of the kingdom, thus encumbered. 

The West Indies were gradually exhausted under the system, and their 
people despoiled of their property by virtue of laws passed by men who 
paid no portion of the enormous loss thus inflicted upon their fellow-subjects. 
The people of Canada have had new systems inflicted upon them with a 
view to the maintenance of peace, but peace there is none. All desire to 
obtain the right of self-government, the first step in which will be resistance 
to the monopoly system. 

Of all the colonies of England, the only one that has prospered is this 
Union, and it has so done, because it has, in a certain degree, exercised the 
power of self-government, manifested by a determination to bring the loom 
and the anvil to take their natural places by the side of the plougn and the 
harrow. Hence it is that every colony of Great Britain, Ireland included, 
desires annexation to us and separation from her. The tendency to voluntary 
union exists in a degree exceeding any thing that the world has yet seen. 
Nevertheless, we are yet but little more than a colony. Our people have no 
control over their own actions. They are almost as dependent upon the will 
of those who now desire, though vainly, to guide the movements of England, 
as are those of Canada. 

If the people of that country determine to make railroads, iron rises in 
price, and we build furnaces and open coal mines, and import people to make 
iron and mine coal. If they cease to make roads, we shut up our furnaces 



* "Thither nearly the whole convict population of Great Britain and Ireland, about 3500 
annually in number, were sent for several years. * * The consequence was, that ere 
long three-fifths of the inhabitants of the colony were convicts. * * The morals of the 
settlement, thus having a majority of convicts, were essentially injured. Crimes unut- 
terable were committed ; the hideous inequality of the sexes induced its usual and 
frightful disorders; the police, how severe and vigilant soever, became unable to coerce 
the rapidly increasing multitude of criminals; the most daring fled to the woods, where 
they became bush-rangers; life became insecure, and property sank to half its former 
yalue." — BlackwoodCs Magazine, November, 1 8 19. " At present, there are, or at least should 
be, above 5000 criminals annually transported from the British Islands." — Ibid. 



THE HARMONY OF INTERESTS. 



225 



and mines, and then the iron men and the coal men have to endeavour to raise 
food. If they ask a high price for cloth, we build mills. If employment be- 
come scarce with them, and their people cease to consume cloth, we close our 
mills, and our operatives are condemned to idleness. If the Bank of England 
make money cheap, we buy iron and cloth on credit ; if it make it dear, we 
are called upon for payment, and then we break. If employment for capital 
be denied at home, our houses and lands rise in price j if capital become 
scarce, our houses and lands fall in value. If we build mills and furnaces, 
our people stay at home ; if we close them, they scatter abroad. If money 
be cheap in England, our government obtains a large revenue from duties on 
the goods that are bought on credit ; if it be dear, the revenue falls off, and 
the government begs for loans in Europe. The value of every thing, and 
the movement of every thing, in this country, are settled by the movement 
of the Bank of England, of all the large institutions of the world the one 
in the government of which there is manifested the least capacity; and the 
one, consequently, that possesses in the smallest degree the power of self- 
government. Four times in thirty years has it been on the verge of bank- 
ruptcy, and yet to its car and that of the government of England, now 
floundering in a sea of troubles, is this Union attached by aid of the system 
now known by the name of free trade. 

For thus relinquishing the power of self-government, there should be a 
large consideration ; yet all that we receive from Europe in return for all we 
send her is fifty cents' worth of iron, half a pound of wool, as much flax, an 
ounce or two of silk, a cup and saucer, and the weaving and twisting of a pound 
and a half of cotton, per head, all of which could be produced or performed 
here by fewer people than have come here in a single year, when we have made 
a market for their labour. Half a million of people would produce treble the 
flax, the wool, the silk, and the iron, the china-ware, and spin and weave treble 
the quantity of silk, wool, flax, and cotton, that we receive from Europe in re- 
turn fur all the land and labour employed in producing the cotton, tobacco, rice, 
grain, butter, cheese, pork, and other commodities that we send to that quar- 
ter of the world ; and that half million would consume almost as much cot- 
ton as is now consumed by all the people of Ireland, besides being cus- 
tomers to the farmer for fifty millions of dollars' worth of food, timber, and 
other of the products of the soil. We thus relinquish the power of self- 
government, not only without receiving an equivalent, but we give our pro- 
perty without an equivalent, and therefore it is that the farmers and planters 
of the Union remain poor when they might become rich. 

Rich they would grow, for the people thus imported would require a vast 
amount of shipping, and cotton, rice, and tobacco would go cheaply abroad, 
while a vast consumption at home would maintain the price, and both farmer 
and planter would be enabled to consume more largely of coffee, tea, silks, 
books, pictures, gold, silver, and all other articles of necessity or luxury not 
produced at home, and the producers of those commodities would consume 
more cloth and iron, both of which we should then produce so cheaply that 
we could send them abroad, and thus would come wealth and prosperity, 
happiness and independence. 

To the consciousness of the necessity for protection against the monopoly 
system was due the state of feeling that led to the Revolution. Resistance 
to oppression led, on various occasions, to non-importation resolutions, and 
the people were everywhere urged to endeavour to clothe themselves. The 
necessity for protection was recognised by the early Congresses, and its im- 
portance urged upon them by every administration. 

Fifty years since, power changed hands ; but with the accession of Mr. 

29 



226 



TEE HARMONY OF INTERESTS. 



Jefferson came no change of policy.' He thought a the manufacturer should 
take his place by the side of the agriculturist." From that time, for a period 
of thirty-six years, every chief magistrate, elected by the people, was from the 
planting States of the Union, and all of them elected by the same party 
that elected Mr. Jefferson, and each and every one of them was an advocate 
of the system which tended to bring the loom to the neighbourhood of the 
plough, and thus to make a market on the land for the products of the land. 
By the last of these, his views on this subject were forcibly expressed in a 
letter that has frequently been published, and from which the following is an 
extract : 

"I will ask, what is the real situation of the agriculturist? Where has the American 
farmer a market for his surplus produce? Except for cotton, he has neither a foreign 
nor home market. Does not this clearly prove, when there is no market either at home 
or abroad, that there is too much labour employed in agriculture, and that the channels 
for labour should be multiplied ? Common sense points out at once the remedy ; draw from 
agriculture this superabundant labour, employ it in mechanism and manufactures, 
thereby creating a home market for your breadstufTs, and distributing labour to the most 
profitable account, and benefits to the country will result. Take from agriculture in the 
United States six hundred thousand men, women, and children, and you will at once give 
a home market for more breadstuffs than all Europe now furnishes us. In short, sir, we 
have been too long subject to the policy of British merchants. It is true that we should 
become a little more Americanized, and. instead of feeding the paupers and labourers 
of England, [as we do by sending there for her manufactures,] feed our own ; or else, 
in a short time, by continuing our present [free trade] policy, we shall all be rendered 
paupers ourselves.'" — President Jackson. 

At the close of that period there was a change of policy. Elected \ry the 
same party that had elected his predecessor, Mr. Van Buren adopted the 
policy which tends to the separation of the consumer from the producer, to 
the impoverishment of the land and its owner, and the maintenance of tho 
monopoly system by which England had acquired the control of the move- 
ments of the world. The effects were disastrous, as may be seen by all who 
study the diagrams given in the third chapter, and the consequence was a po- 
litical revolution. For the first time in forty years, a president was elected 
by the people not being of the party generally known as that of the Demo 
crats. Democracy had changed sides, and the people did not go with it 
The consequence of this was, nearly two years later, a return to the polic) 
of protection and a restoration of prosperity, and with prosperity the party 
that had so long controlled the movements of the country was again restored 
to power. Unwilling, however, to acknowledge that the revolution of 1840 had 
been the consequence of an error of policy, they ascribed it to various minor 
and insignificant causes, and proceeded to the enaction of the tariff of 1846, 
and the consequence was another revolution by which the party of protec- 
tion was again restored to power. Like the former, that revolution is now 
ascribed to minor causes ; but those who will study the diagrams to which 
I have above referred can scarcely fail to see that it was due to the fact 
that the party styled Democratic had espoused a course of policy that 
tended to diminish the value of labour, to degrade the labourer, to de- 
press the democracy at home, and to maintain the aristocracy abroad; 
nor can they, as I think, fail to arrive at the belief that no party adverse 
to protection can again hold power in this country. Such being the 
case, the interest of both parties, if actuated solely by purely selfish consi- 
derations, would lead to the advocacy of the same course of policy — the one 
in power desiring that it might not be adopted, and that thus they might 
profit by the agitation of the question for maintaining themselves in autho- 
rity, and the one out of power, that it might be settled, and the agitation of 
tho question brought to a close. 



THE HARMONY OF INTERESTS. 



227 



CONCLUSION. 

Much is said of " the mission" of the people of these United States, and 
most of it is said by persons who appear to limit themselves to the considera- 
tion of the potters of the nation, and rarely to think of its duties. By such 
men the grandeur of the national position is held to be greatly increased by 
having expended sixty or eighty millions upon a war with a weak neighbour, 
and having thus acquired the power to purchase, at a high price, a vast body 
of wild land that would, in the natural course of events, have been brought 
within the Union, in reasonable time, without the cost of a dollar or a life. 
By such men, the fitting out of expeditions for the purpose of producing civil 
war among our neighbours of Cuba, is held to be another evidence of gran- 
deur. Others would have us to mix ourselves up with all the revolutionists 
of Europe ; while a fourth and last set sigh at the reflection that our fleets 
and armies are too small for the magnificence of our position. 

By some it is supposed that our " mission" is that of monopolizing the 
commerce of the world, and the time is anxiously looked for when we shall 
have " diplomatic relations'' with "vast regions of the East," Persia, Corea, 
Cochin-China, Burmah and Japan, with whom " nothing but the steam-ship 
can successfully introduce our commerce." By "persevering and successful 
efforts," it is thought we may secure the " commerce of Japan." That done, 

«* New York," it is thought, « would become the depot and storehouse and entrepots of the 
world, the centre of business and exchanges, the clearing house of international trade and 
business, the place where assorted cargoes of our own products and manufactures, as well 
as those of all foreign countries, would be sold and reshipped, and the point to which 
specie and bullion would flow, as the great creditor city of the world for the adjustment 
of balances, as the factor of all nations and" the point whence this specie would flow into 
the interior of our country through all the great channels of international trade and inter- 
course. With these great events accomplished, and with abundant facilities for the ware- 
housing of foreign and domestic goods at New York, it must eventually surpass in wealtlu 
in commerce, and population, any European emporium, whilst, as a necessary consequence, 
all our other cities and every portion of the Union and all our great interests, would de- 
rive corresponding advantages." — Treasury Report, December, 1848. 

The cost of a mission to Japan would build half a dozen furnaces that 
would add more to the wealth of the nation in five years than the commerce 
of that country would do in half a century. The amount we have expended 
on the mission to Austria, in search of a market for tobacco, would bring 
here as many G-ermans as would consume almost as much of our tobacco as 
is now consumed in the empire, and those tobacco consumers would do more 
for the growth of New York than either Japan or Austria. 

The English doctrine of " ships, colonies, and commerce" is thus reproduced 
on this side of the Atlantic, and its adoption by the nation would be fol- 
lowed by effects similar to those which have been already described as exist- 
ing in England. There, for a time, it gave the power to tax the world for the 
maintenance of fleets and armies, as had before been done by Athens and 
by Rome, and there it is now producing the same results that have elsewhere 
resulted from the same system, poverty, depopulation, exhaustion, and weak- 
ness. 

But little study of our history is required to satisfy the inquirer that the 
power of the Union, and its magnificent position among the nations of the 
earth, are due to the fact that we have to so great an extent abstained from 
measures requiring the maintenance of fleets and armies. The consequence 
has been that taxes have been light, capital has accumulated rapidly, labour 



228 



THE HARMONY OF INTERESTS. 



has been productive, and the labourer has received wages that have enabled 
him to feed, clothe, and educate his children, and the nation has thus per- 
formed its true " mission" in elevating the condition of man. If we desire 
to find exceptions to this, we must look to those periods in which the policy 
of Washington, Jefferson, Madison, Monroe, and Jackson, was departed from, 
and when the government adopted measures tending to the maintenance 
of the English monopoly of machinery, and there we shall find taxes more 
heavy, capital accumulating more slowly, labour more unproductive, and the 
wages of labour so much depressed that the labourer finds it difficult to feed 
or clothe his children, and still more difficult to educate them. 

Two systems are before the world ; the one looks to increasing the propor- 
tion of persons and of capital engaged in trade and transportation, and therefore 
to diminishing the proportion engaged in producing commodities with which to 
trade, with necessarily diminished return to the labour of all ; while the other looks 
to increasing the proportion engaged in the work of production, and diminishing 
that engaged in trade and transportation, with increased return to all, giving to 
the labourer good wages, and to the owner of capital good profits. One looks 
to increasing the quantity of raw materials to be exported, and diminishing 
the inducements to the import of men, thus impoverishing both farmer and 
planter by throwing on them the burden of freight; while the other looks to 
increasing the import of men, and diminishing the export of raw materials, 
thereby enriching both planter and farmer by relieving them from the pay- 
ment of freight. One looks to giving the products of millions of acres of 
land and of the labour of millions of men for the services of hundreds of 
thousands of distant men ; the other to bringing the distant men to consume 
on the land the products of the land, exchanging day's labour for day's la- 
bour. One looks to compelling the farmers and planters of the Union to 
continue their contributions for the support of the fleets and the armies ? the 
paupers, the nobles, and the sovereigns of Europe ; the other to enabling our- 
selves to apply the same means to the moral and intellectual improvement 
of the sovereigns of America.* One looks to the continuance of that 
bastard freedom of trade which denies the principle of protection, yet doles 
it out as revenue duties ; the other to extending the area of legitimate 
free trade by the establishment of perfect protection, followed by the 
annexation of individuals and communities, and ultimately by the abo- 
lition of custom-houses. One" looks to exporting men to occupy desert 
tracts, the sovereignty of which is obtained by aid of diplomacy or war; 
the other to increasing the value of an immense extent of vacant land by 
importing men by millions for their occupation. One looks to the centrali- 
zation of wealth and power in a great commercial city that shall rival the 
great cities of modern times, which have been and are being supported by aid 
of contributions which have exhausted every nation subjected to them ; the 
other to concentration, by aid of which a market shall be made upon the 
land for the products of the land, and the farmer and planter be enriched. 
One looks to increasing the necessity for commerce ; the other to increasing 
the power to maintain it. One looks to underworking the Hindoo, and sink- 
ing the rest of the world to his level; the other to raising the standard of man 
throughout the world to our level. One looks to pauperism, ignorance, de- 
population, and barbarism ; the other to increasing wealth, comfort, intelligence, 
combination of action, and civilization. One looks towards universal war*; 
the other towards universal peace. One is the English system ; the other we 



* Russia is now raising by loan five millions of pounds sterling to pay the expenses 
of the war in Hungary. The farmers *and planters of the Union are the chief contri- 
butors to this loan 



THE HARMONY OF INTERESTS. 



229 



may be proud to call the American system, for it is the only one ever de- 
vised the tendency of which was that of elevating while equalizing the 
condition of man throughout the world. 

Such is the true mission of the people of these United States. To them 
has been granted a privilege never before granted to man, that of the exer- 
cise of the right of perfect self-government; but, as rights and duties are 
inseparable, with the grant of the former came the obligation to perform the 
latter. Happily their performance is pleasant and profitable, and involves 
no sacrifice. To raise the value of labour throughout the world, we need 
only to raise the value of our own. To raise the value of land throughout 
the world, it is needed only that we adopt measures that shall raise the value 
of our own. To diffuse intelligence and to promote the cause of morality 
throughout the world, we are required only to pursue the course that shall 
diffuse education throughout our own land, and shall enable every man more 
readily to acquire property, and with it respect for the rights of property. 
To improve the political condition of man throughout the world, it is needed 
that we ourselves should remain at peace, avoid taxation for the maintenance 
of fleets and armies, and become rich and prosperous. To raise the condition 
of woman throughout the world, it is required of us only that we pursue 
that course that enables men to remain at home and marry, that they may 
surround themselves with happy children and grand-children. To substitute 
true Christianity for the detestable system known as the Malthusian, it is needed 
that we prove to the world that it is population that makes the food come 
from the rich soils, and that food tends to increase more rapidly than popula- 
tion, thus vindicating the policy of God to man. Doing these things, the 
addition to our population by immigration will speedily rise to millions, and 
with each and every ye&r the desire for that perfect freedom of trade which 
results from incorporation within the Union, will be seen to spread and to 
increase in its intensity, leading gradually to the establishment of an empire the 
most extensive and magnificent the world has yet seen, based upon the prin- 
ciples of maintaining peace itself, and strong enough to insist upon the mainte- 
nance of peace by others, yet carried on without the aid of fleets, or armies, 
or taxes, the sales of public lands alone sufficing to pay the expenses of 
government. 

To establish such an empire — to prove that among the people of the 
world, whether agriculturists, manufacturers, or merchants, there is perfect 
harmony of interests, and that the happiness of individuals, as well as the 
grandeur of nations, is to be promoted by perfect obedience to that greatest of 
all commands, " Do unto others as ye would that others should do unto you," 
— is the object and will be the result of that mission. Y\ r hether that result shall 
be speedily attained, or whether it shall be postponed to a distant period, 
will depend greatly upon the men who are charged with the performance of 
the duties of government. If their movements be governed by that enlight- 
ened self-interest which induces man to seek his happiness in the promotion 
of that of his fellow-man, it will come soon. If, on the contrary, they be 
governed by that ignorant selfishness which leads to the belief that indivi- 
duals, party, or national interests, are to be promoted by measures tending 
to the deterioration of the condition of others, it will be late. 



THE END. 



Philadelphia, July 4, 1850. 

Bear Sir — There are two diseases raging in the Union — Anti-slavery 
and Pro-slavery — and from the latter you are, I think, by no means entirely 
free, for which reason, perhaps, it is that you doubt the accuracy of my views 
in regard to the causes of the former. I propose now to furnish you a sketch 
of the causes of your own complaint, with a view to indicate the remedy, 
believing that you may be satisfied that both owe their existence to the same 
error of commercial policy, and that the same remedial measures will eradi- 
cate both, to the great advantage of ourselves, and of the Union in which it 
is our fortune to live. 

Sixty years since, the South united with the North in prohibiting the intro- 
duction of slavery into the North- Western Territory. Little more than forty 
years since, southern men united with northern men in rejecting the appli- 
cation of Indiana to be exempted from the operation of the Ordinance of 
1787. Twenty years since, Maryland, Virginia, and Kentucky, were almost 
prepared for measures looking to the abolition of slavery within their limits, 
and it was the almost universal belief throughout those States, that gradual 
abolition was indispensable to their progress in population, wealth, and 
happiness. Since then, a change, and a most remarkable one, has "come 
over the face of the southern dream," and it has been discovered that slavery 
is "a blessing" instead of being a curse, as it was held to be by Washington, 
Jefferson, Madison, and most if not all of their contemporaries, men perhaps 
quite as well qualified to form a correct judgment in regard thereto as are any 
of their descendants. It has also been discovered that the wealth of slave 
States grows more rapidly than does that of free ones, and that true policy on 
the part of the latter would _ lead them to reduce the labouring classes to a 
state of slavery. Further, it has been proved that one of the great objects 
of certain provisions of the Constitution, was the maintenance of an " equi- 
librium" between the free and the slave States, and that the ordinance of ; 87 
was "an act of aggression" upon the South, which otherwise would have 
secured to slavery, and to itself, a portion of the fertile region north of the 
Ohio, in which "the domestic institution" would have continued to exist 
side by side with those of the numerous immigrants from the free States, and 
from Europe, that would have flocked to this northern branch of the southern 
tree. Extraordinary as is this idea, it is but one of many almost equally 
so that have been brought out in the long course of pro-slavery agitation, and 
brought out, too, by men who profess to be disciples of Adam Smith ! The 
answer to the theory of "equilibrium" might be found in the fact, that the 
effort in 1812, to extend the area of free soil, by incorporating Canadian 
States within the Union, was a Southern measure. 

There has thus been a total revolution of the southern feeling on this sub- 
ject, and it dates back less than twenty years. Were we to look for the cause 
of this to any mere change of moral feeling, we should err as widely as we 
should do were we to ascribe the northern agitation in regard to free-soil to 
an increased conviction of the sinfulness of slavery, and an increased belief 
that duty to his God required interference on the part of the northern man 



2 



with the rights of property of his southern neighbour. The man of the Nortfo 
who denounces slavery as a crime and the slave-holder as a criminal, is not 
more moral than were thousands of his predecessors who owned slaves and felt 
that in so doing they were guilty of no crime; nor is the man of the South who 
regards slavery as "a blessing" less moral than were thousands of his predeces- 
sors who regarded it as a blight, and held it to be the duty of all good citizens 
to exert themselves for its extinction. What, then is the cause of this extra- 
ordinary change ? Why is it that people who but twenty years since were so 
nearly united in opinion are now so widely separated ? Why is it that the 
cause of emancipation goes backward in the South, as abolitionism and free- 
soilism go forward in the North? This is a question of great interest, and I 
will endeavour to answer it, but to do so satisfactorily it will be necessary to 
show what are the circumstances that in other countries have marked the 
progress of man from slavery to freedom, or from freedom to a state of 
slavery. 

In all those countries in which men have become free, we see that freedom 
has come with increased density of population and increased value of land, 
the owners of which, as a body, have become more rich as its occupants be- 
came more free, and as their lands became more and more divided. If we 
desire evidence of this we may look to the steady growth, for centuries, of 
value in the land of England, accompanied by increased freedom of the 
people employed in its cultivation : or to Belgium, where the freest people of 
continental Europe pay," as annual rent for the use of flax land, ten times as 
much as would purchase the fee of an acre of good cotton land in Alabama 
-—or to France, where land increases steadily in value as man becomes more 
free — or, in fact, to any part of the world in which the value of land is in- 
creasing, or where it has at any time increased. The prosperity of the land- 
holder is, therefore, inseparably connected with the groiving freedom of the 
labourer. 

If, on the contrary, we look to those countries in which land diminishes in 
value, we shall see population diminishing, land accumulating in fewer hands ? 
the landholder becoming poor, and its cultivator becoming less free. For 
proof of this, we need only look to history for the course of things in Egypt,. 
Greece, and Italy, or to the newspapers for that in Ireland, where the land- 
holder becomes pauperized as the labourer becomes enslaved. 

Why this is and must be so may readily be explained. In order that land 
may increase in value there must be increase in the quantity of its products,, 
and in their exchangeable value, and that such increase may take place there 
must be increase of population, which cannot be the case when all are en- 
gaged in agriculture. That such increase may take place the consumer must 
take his place by the side of the producer. The farmer who is obliged to 
take his corn to distant markets exhausts his land, and is then obliged to fly 
to lands still more distant from market, and the exchangeable value of his. 
products diminishes; whereas, he who has a market at his door improves 
his land, and obtains a constantly increasing return to labour, and the value 
of his products in exchange for other commodities is constantly increasing, 
and labour yields, therefore, a constantly increasing return of the necessa- 
ries, comforts, and luxuries of life. The one obtains small crops of corn ? 
which he sells at 15 or 20 cents a bushel. The other obtains large crops., 
and sells at 60 or 70 cents. The cost to the latter of raising a slave would 
be so great that it would never be repaid, whereas to the former it would 
be so small that he could afford to raise slaves for sale, and thus the necessary 
consequence of increase in the quantity and value of the products of the 
earth, and increase in the value of land — the immovable property — is a dimi- 
nution in the exchangeable value of the slave- — the movable property — and 



3 



therefore it is that with the increasing productiveness of labour, and value of 
land, the involuntary labourer passes gradually into the voluntary one, the 
slave becoming free as the master becomes rich. 

With every step in the contrary direction the reverse is the case. The man 
who has exhausted his land abandons it to seek for other land to be again ex- 
hausted. He attaches no value to the immovable property, but he values 
greatly that which is movable — his slave — and the more distant he is from 
market the lower will be the exchangeable value of his products, and the less will 
be the cost of raising slaves. Depopulation, diminished productiveness of 
labour, poverty, and pro-slavery go therefore hand in hand with each other, 
while with every step in the increase of population and wealth there must be 
a growing tendency towards freedom. In the one case slavery will be regarded 
as "a blessing," while in the other it will be deemed to be a blight, if not a 
curse. 

The careful students of the Wealth of Nations, of whom, however, the num- 
ber is very small, do not need to be told that these views are in perfect ac- 
cordance with those of its illustrious author, who looked with great affection 
on the small proprietor cultivating his own land, and on the sturdy yeoman 
in the enjoyment of the independence and respectability that he saw were 
naturally consequent upon increased productiveness of agriculture, resulting 
from the combined exertions of artisans and agriculturists, any interference 
with which he denounced as " a manifest violation of the most sacred rights 
of mankind." It was the perfect knowledge that he possessed of the fact that 
diversity of employment was indispensable to the growth of agriculture that led 
him to reprobate, as " only fit for a nation of shopkeepers," the system which 
had for its object that of compelling all the nations of the world to make their 
exchanges in British markets. He saw clearly that with increase in the pro- 
portion of mechanics to agriculturists there was a great increase in the domes- 
tic market, with diminished necessity for resorting to distant ones, while the 
power there to go was constantly increasing, because the workman who ate the 
food converted the wool into cloth and fitted it to be cheaply transported — 
and therefore it was that he regarded every measure tending to prevent in- 
crease in the ratio of mechanics to agriculturists as "a great discouragement of 
agriculture," and every one tending to compel the foreign agriculturist to dis- 
pense with the proximity of the artisan as a violation of man's most "sacred 
rights." 

His system and that of the South are the antipodes of each other. The 
one looks to bringing the consumer to the side of the producer, increasing popu- 
lation, augmenting the value of land, and increasing the freedom of man, with 
constant increase in the poicer to trade. It is anti-slavery in all its tendencies. 
The other looks to separating the consumer from the producer, dispersing 
population, diminishing the value of land and the freedom of man, with con- 
stant increase in the necessity for trade, and diminution of the power to trade. 
It is pro-slavery in all its tendencies, because of its most exhausting character. 
Instead of encouraging the mechanic to come and settle near them, bringing 
the market to their doors, and enabling them to improve their land, the people 
of the South have kept him at a distance, and have compelled themselves to 
seek distant markets, and their lands have been exhausted, the consequence of 
which has been a necessity for seeking other lands ; and therefore it is that 
the movable property — the slave — has tended to rise in their estimation as 
compared with the immovable property — the land : the strongest evidence that 
could be given of the suicidal character of Southern policy. 

How it has operated upon the older Southern States, up to the date of the 
last census, may be seen from the following table, in which is given in thou- 
sands, the movement of their population : — 







4 












1790. 


1800. 


1810. 


1S20. 


1830. 


1840, 


Maryland, . . 


319 


341 


380 


407 


447 


470 


Virginia, 


748 


880 


974 


1065 


1211 


1239 


North Carolina, . 


393 


478 


. 555 


638 


737 


753 


South Carolina, . 


249 


345 


415 


502 


581 


594 




1,709 


2,044 


2,324 


2,612 
12| 


2,976 


3,056 


Per centage of increase, 


20 


14 


14 


3 



W e here see that those States continued to grow in wealth and population 
up to the period of the census of 1830, and up to that period there existed no 
abolitionism — no free soil party — nor had the mass of the people of the South 
the remotest idea that slavery was other than a blight. The following decennial 
period is marked by the flight of nearly the whole annual growth of the popu- 
lation of those States, and with that flight came pro-slavery, necessarily fol- 
lowed by Northern agitation, because it was a consequence of the adoption of 
a policy directly opposed to their best interests. The Nashville Convention 
dates anti-slavery agitation back to 1834, and it was exactly at that period 
that the institution of domestic slavery began to be lauded as " a blessing." 
We see thus that an increased tendency to the dispersion of southern popula- 
tion, pro-slavery, and abolition, came into existence almost at one and the same 
time, and that the two latter were a necessary consequence of the former. If, 
then, we can ascertain the cause of that tendency to dispersion, we shall be at 
little loss to determine why it is that public opinion in the two sections of the 
Union has been so rapidly moving in opposite directions, until at length we 
have arrived at a point that seems almost to forbid a settlement. 

Up to 1824, the political economy of Adam Smith — that which regarded 
the separation of the mechanic and agriculturist as being in a high degree de- 
trimental to the progress of agriculture — was held to be democratic policy, and 
the opposition to it was deemed anti-democratic. The tariff of that year received 
but five votes in the four States of Maine, New Hampshire, Massachusetts, and 
Rhode Island. That of 1828 received but little more than one-third of the 
votes of New England, while the opinion of Mr. Madison in favour both of the 
right and the expediency of legislation with a view to protection, was then re- 
corded in his letters to J udge Cabell. Such likewise was the opinion of General 
Jackson, and so long as democracy and protection were held to be consist- 
ent with each other— and the tendency of measures was consequently in that 
direction — there existed comparatively little tendency to the dispersion of south- 
ern population, and neither anti-slavery nor pro -slavery was heard of. Agita- 
tion on the subject was unknown. 

The year 1832 brought with it nullification, and at the instance of South 
Carolina the policy of the Union was changed. From that year rail-road iron 
was free of all duty, the iron manufacture was prostrated, and the progress of 
other manufactures gradually diminished, until at length it ceased. Almost 
the whole energies of the nation were devoted to making roads by which to 
enable the farmer to go to market, mid to enable his customers to fly to the 
West, there to become his rivals, instead of building mills and furnaces by 
means of which the market should be made to come to him. Dispersion was 
the order of the day. The slave population was scattered over the whole 
South, and the free population scattered throughout the West, with constant!}' 
increasing necessity for roads, and a constantly increasing diminution in the 
power to labour with advantage, the result of which was seen in the total pros- 
tration of 1842. Examine these facts and satisfy yourself, as I think you can, 
that diminution in the value of the land of the older southern States, and 
consequently in the wealth of their people, has kept steady pace with the growth 
of pro-slavery, and that both owe their existence to the abandonment of the 



5 



policy advocated by Adam Smith and his followers, Jefferson and Madison, 
which looked to placing the mechanic by the side of the food, thus' diminishing 
the cost of transportation and increasing the power to maintain trade. 

In 1820, the population of the States south of Virginia and Kentucky, in- 
cluding all those in which cotton is grown, was 2,300,000. In the ensuing 
ten years, it increased about 900,000, while the older Southern States, Mary- 
land, Virginia, and the two Carolinas, increased about 600,000, and thus the 
proportions of all were fairly maintained. In the following ten years, the 
desertion of the older States became so complete that their growth was but 
80,000, while that of the States south and west was a million, and the result 
was that the year 1840 exhibited the extraordinary spectacle of a population 
little larger than that of New York and Pennsylvania combined, occupying 
the whole country south of Virginia and Kentucky, with an area of about half a 
million of square miles, being almost five times as great as the area of those 
States, and yet so anxious after territory that they were ready almost to go to 
war for the purpose of securing Texas. The census now about to be taken 
will exhibit still more extraordinary results, for it will give a population not 
greatly exceeding that of those two States occupying not only that half million 
of square miles, but Texas and its immense surface in addition, and yet so 
anxious for further territory as to be grasping after California, and ready almost 
to go to war with the rest of the Union for a part of New Mexico, and with 
each and every step in the progress of depopulation, slavery is held, and neces- 
sarily held, to be more and more "a blessing." 

Maryland, Virginia, North Carolina, Kentucky, and Tennessee, grow chiefly 
food, and the men who mine coal, and make cloth and iron, are consumers of 
food. The closing of the iron works of Pennsylvania and Virginia, and of 
the North generally, and the total stoppage in the progress of manufactures 
throughout the Union, tended to diminish the number of consumers of food, 
an.d to compel the makers of cloth and iron to disperse themselves over the west, 
that they might there become producers of food, the necessary consequence of 
which was a diminution of demand for the products of the Northern slave 
States, followed by a tendency to abandon the land and remove further south, 
there to cultivate cotton. The closing of northern mills and furnaces tended 
therefore to increase the number of cotton producers, and to diminish the num- 
ber and the power of cotton consumers, and to render the South more com- 
pletely dependent on Great Britain for a market in which to sell cotton, and 
to buy cloth and iron, and with each and every year its people have been 
giving more and receiving less in exchange, with a tendency to further exhaus- 
tion, impoverishment, and dispersion, followed by an increase in the pro-slavery 
feeling. What have been the results, as shown in the value of cotton compared 
with that of cloth and iron, I will now show. 

1815 to 1817 1S27-1834 1845-1816. 

Cotton consumed in England, lbs. 100,000,000 275,000,000 596,00' 000 

Value, £8,000,000 9,000,000 11,400,000 

She pays for this in cotton-cloth and iron, the prices of which, at these 
periods, were as follows : — 

A piece of calico, of 24 yards 16|6* 7|6f 6|7 

A ton of merchant-bar iron £U$ £1 5 £9 10 

* McCulloch"s Statistics, Vol. II. p. 70. 

f This is the average of the years from 1831 to 1S34, as given in Burns's Con met- 
cial Glance, and copied in the Merchants' Magazine, Vol. XIX. p. 277. 
J Average of 1817 to 1S19— Merchants' Magazine, Vol. XX. p. 337. 

1* 



Had the whole been paid in these, the planter would hare received of 

Cloth, pieces ' 9,700,000 24,000,000 34,700,000* 

Or iron, tons 730,000 1,250,000 ] ,200,000 

The additional freight, home and foreign, charges, commissions, &c, in the 
last period were, at three cents per pound, on 496,000,000 of pounds, say 
$15,000,000. For this the planter would receive, in Liverpool, 470,000 
additional tons of iron, the value of which, in Liverpool, at the present mo- 
ment, would be about $11,000,000, and thus he not only gave away his cotton, 
but gave with it a large portion of the cost of transportation. The whole 
return to him for 600,000,000 ivas not as great as it had been for 100,000,000. 

It thus appears that notwithstanding all the improvements in manufacture, 
the planter had to give in the last period six times the quantity of cotton to 
obtain three and a half times the cloth that he could have had in the first — 
and six times as much to obtain a smaller quantity of iron. 

The tobacco trade shows precisely similar results. In 1822, we exported 
83,000 hogsheads, and the price was $74 82, yielding about $6,200,000. In 
1845, we exported 147,000 hogsheads, and the price was $50, yielding. 
$7,350,000. Deducting the extra expense of transportation to the place of 
shipment, the producers received leys for the large quantity than they had 
done for the small one. From 1830 to 1835, the export averaged 90,000, 
and the amount was $6,200,000, yielding to the producer, on his plantation,, 
as much as the larger quantity in 1845. The sum of $6,200,000, at these 
two periods, would have bought in Liverpool : — 

1830 to 1835, pieces of cloth, 3,300,000, or tons of iron, 200,000 
1845, " " 3,900,000 " 130,000 

The planter is giving almost two-thirds more of tobacco for twenty per cent, 
more cloth, although his brother planter is almost ruined by the low price of 
cotton ; but in the case of iron . it is worse, for he gives two-thirds more for 
thirty-five per cent, less, and this result is the natural consequence of Southern 
commercial policy. With every increase in the tendency to found, or to 
occupy, new States, the exchangeable value of Southern products must diminish 
in its ratio to population, and the pro-slavery feeling must increase. 

It is usual to attribute the fall in the price of cotton to too rapid an increase 
in the production, but the real cause is that Southern policy has prevented in- 
crease of consumption, because it has tended greatly to diminish the power to 
produce commodities to be given in exchange for it. The quantity of cotton 
produced has done little more than keep pace with the increase in the popula- 
tion of the States in which it is grown. Twenty years since the latter was 
3,200,000, and the production was almost 400,000,000 of pounds. Now, the 
occupants of those States must number about five millions, and the average 
crop of the last five years is scarcely more than 800,000,000 of pounds. The 
growth of production has thus been slow. If next we compare the prices ob- 
tained in the ports, at the different periods, and set off against them the extra 
transportation incident to the occupation of so vast a surface by a small popu- 
lation, we shall be compelled to arrive at the conclusion that the return to 
labour, per head, is far less than it was twenty years since, and thus that dis- 
persion, diminished value of land, poverty, and pro-slavery have come together, 
and that necessarily. The remedy for all is to be found in the adoption of a 
policy that will bring the consumer to the side of the producer, and enable 
the landholder to grow rich as his slaves become more free. That done, pro- 
slavery and anti-slavery agitation will pass away, as they came — together. 

How essential to the South is a change of policy will, I think, become obvi- 
ous to you on a retrospect of the proceedings of the last twenty years. It was 



7 



in 1821 that it extended its area by the purchase of Florida. From 1835 to 
1840 it was proposed to incorporate Texas, but the proposition was repeatedly 
declined. A treaty for that purpose was then made, but it was rejected by 
the Senate. Finding that constitutional measures would not accomplish the 
object, unconstitutional ones were resorted to, and Texas was admitted by a 
mere majority, and to this the North submitted. War was then made on 
Mexico — a Southern measure, having for its object the acquisition of more 
.slave territory. California was bought. All of these were pro-slavery mea- 
sures. During all this time the North made no effort to annex Canada, but 
had it done so, and had it pursued the same course as was pursued in 
relation to Texas, what would the South have said and done? Would 
it not have threatened resistance and dissolution? Would its members 
not have banded together with a determination to stop all legislation? 
What did the North do? Nothing ! With the single exception of the proposal 
to prevent slavery from passing its present limits, a defensive measure, nothing 
has been done or attempted to be done during all the period in which the South 
has been thus engaged in offensive measures, for the forcible acquisition of terri- 
tory to be used for the accomplishment of Southern objects. Northern members 
have never banded themselves together to stop all legislation even when in- 
tended exclusively for the promotion of southern objects deemed most likely 
to be injurious to northern interests. Nevertheless the South complains unceas- 
ingly of u aggressions/' and it does so because its whole policy tends to weaken 
itself, as further continuance in the same direction must continue to do. The 
more territory it obtains, and the more it is allowed to pursue its own course 
in the acquisition of territory for the accomplishment of southern objects, the 
louder arc the complaints against the North, which has never bought a foot of 
territory, nor sowjlit to obtain one by any other course than that of its peaceful 
occupation. 

We see thus that with every step in the progress of depopulation, impoverish- 
ment, and weakness, pro-slavery grows, and the measures proposed for the 
maintenance of " the domestic institution" become more and more dangerous 
to the Union and to itself It is now deemed necessary to annex Cuba, 
and the present year has seen no less than two expeditions for that purpose, 
both patronized by the South, and the latter of them defended even on the 
floor of the Senate. Now, if there be any one measure better calculated than 
any other that could be devised for weakening and impoverishing the 
South, it would be the annexation, even if peaceably accomplished, of Cuba. 
Nothing has thus far saved the cotton planter from ruin, but the withdrawal 
of part of the population to be applied to the sugar-culture, which would 
perish at once were Cuba admitted into the Union, and then the force now em- 
ployed in producing sugar would have to return to cotton, although the cotton 
planter is now saved from ruin by nothing but an occasional short crop. 
The pro-slavery feeling, however, overrides all prudential considerations, and 
the probability is, that we shall see a revolution in Cuba, produced by pro- 
slavery agitation, and followed by the emancipation of all the slaves of that 
island. 

The annexation of the Cuban slaves would increase the supply of cotton and 
diminish its price. The annexation of every European immigrant tends to 
increase the demand and raise its price, and yet pro-slavery leads the South to 
seek the former and to interpose obstacles in the way of the latter. The con- 
sumption of cotton, per head, within the Union, is about fourteen pounds. 
In Ireland, it is little more than one. Half a million of Irishmen, or of Ger- 
mans, within the Union, would consume seven millions of pounds, and such 
an importation of men for only ten years, would give, with the natural in- 
crease, a population that would consume more of our cotton than is now con- 



8 



sumed by the whole population of Great Britain and Ireland. At ten cents a 
pound, the latter cannot consume more than about eighty-Jive millions of pounds,* 
and the power to pay for it is steadily decreasing. Immigration trebled from 
1831 to 1835; and it did so again from 1844 to 1847. Under the com- 
promise, it became stationary. It is now steadily receding, and thus it is 
that while the whole policy of the South tends to increase the number of 
cotton producers, it tends to diminish the number and the powers of cotton 
consumers. Had the growth of immigration for the year 1846-7 to the present 
time been the same as in the four previous years, it would be this year six 
hundred thousand, making a market on the land for the products of the land 
to the extent of sixty millions of dollars ; whereas, there is now every reason 
to believe that it will not greatly exceed two hundred thousand, and thus will 
the farmers and planters of the Union be deprived of a market to the extent 
of forty millions of dollars. 

The average cost of raising the people who arrive in the Union exceeds one 
thousand dollars, and it is ihe most valuable species of merchandise that we 
can import, because it is the one that adds value to land, and yet it costs us 
nothing. The immigration of the present year will be less than it should be * 
by 400,000, worth, at $1,000 per head, four hundred millions of dollars, and 
the Union will be poorer than it would otherwise have been by this whole 
amount — and probably much more ; and all this loss is due to pro-slavery 
commercial policy. I beg you now to determine for yourself how much so 
great an interference with the growth of capital tends to diminish the power 
of the people of the Union to make a market for your great staple. 

From 1842-3 to 1847-8, the domestic consumption rose from less than eight 
to almost fourteen pounds per head. It is now stationary, with a tendency 
downwards, whereas it should have grown to almost twenty pounds per head, 
which would give, with a population of twenty-three millions, a home demand 
for 400,000,000, or almost half of the crop. What then would be the 
price of cotton ? Let it be observed that every advance of price resulting from 
increased demand, increases our power to consume, because it is attended with 
general prosperity. English merchants caution us against advanced prices, 
because they " check consumption," but the sole cause of diminished consump- 
tion is the inability of England to increase her production of commodities to 
be given in exchange for it. The reverse would here be the case. The richer 
the planter grew the more iron he would need, and the more iron that was 
needed, the more cotton would be consumed. 

Fortunately for the South, the government lent no countenance to the Cuban 
scheme, so pregnant with ruin to Southern interests. Fortunate for it would it 
have been had the late administration acted towards Mexico as the present one 
has done towards Spain. The sole good fortune to the South in all the recent 
movements, consists, as I think, in the extensive failure of its views in 
regard to territorial aggrandizement. A large portion of Texas is unfit for 
slave cultivation, as is the whole of the recent acquisition from Mexico. Had 
it been otherwise — had New Mexico and California been a new Alabama and 
Mississippi — the effect would have been to produce a still more rapid dis- 
persion of population, attended with a great diminution in the value of landed 
property in all the States east of the Mississippi, a diminution in the return 
to labour, and diminished strength, the natural accompaniment of which would 
have been a very rapid increase of the pro-slavery disease in one part of the 
Union, and of the anti-slavery one in the other. The result might then have 

* Crop. Price. British and Irish Consumption, 

1841 10 3 cents. 97,000,000 

1842 S-2 « 97,000,000 
1847 10-1 « 77,000,000 



9 



been war between the two sections of the Union, but certainly as I think a disso- 
lution of the Union, next to war the greatest calamity that could befall the 
South, whose only security is to be found in the establishment and mainte- 
nance of harmony. 

I pray you now to examine these facts and determine if further progress, 
in the present direction must not be attended with increased weakness on the 
part of the South, and increased danger to its institutions, and further to de- 
termine if a result widely different would not have been obtained by a con- 
tinuance of the policy of 18*28. Had the mining of coal and the manufacture 
of iron gone on, would Virginia have been depopulated ? Had South Caro- 
lina built factories, would her population have ceased to grow I Had they 
rendered available their water power, their fuel, their ore, and their limestone, 
would their lands have so greatly diminished in value ? Would the whole 
South now be seen holding meetings with a view to endeavour to diminish the 

DO 

product of cotton ? Would it not, on the contrary, be now rejoicing in the 
increased facility of obtaining both cloth and iron, and the increased power to 
raise food and cotton consequent upon having brought the consumer to 
take his place by the side of the- producer ? Would not the slave be now 
feeling the benefit in his improved condition, and the master in the increased 
value of his land ? Would not the questions of anti-slavery and free soil have 
remained as undisturbed as they were twenty years since ? Would not the 
harmony that once existed between the North and the South have been main- 
tained 't That it would have been so is, I think, beyond a doubt. 

The whole difficulty, be assured, lies in this question of commercial policy. 
The South is constantly weakening itself, and therefore it is that pro-slavery 
and abolition grow. It has wasted more labour in settling new States, and 
making new roads through them, than would have built furnaces and mills to 
make Jive times over all the iron that is made in Britain, and convert Jive times 
&ver } all the cotton that is grown in America. It wastes, annually, more 
labour than would mine all the coal, smelt all the ore, roll all the iron, and 
make all the cloth, made in Britain — and to this enormous waste of labour 
are due exhaustion, dispersion, weakness, thirst for territory, pro-slavery, and 
jealousy of its Northeru'brethren. 

Had the labour thus wasted been applied in the States east of the Mississippi, 
and north of Florida, leaving Missouri, Arkansas, Texas, and Florida for fu- 
ture settlement, what would be now the value of land in the older States ? 
Would it not be double what it is at present ? What would be the effect were 
it now to be so applied ? I pray you to answer the question, and then deter- 
mine for }^ourself how much the South has paid for almost twenty years of 
southern policy, and why it is that pro-slavery grows at the South, producing 
-abolitionism and i'ree-soilism at the North. That done, determine if the South 
does not owe it to itself to adopt a system of policy that shall bring about 
harmony with the North, and security to itself. 

It is time that it should terminate its dependence on the market of a country 
whose production does not, cannot, keep pace with our own, and which, there- 
fore, has, and must continue to have, in each successive year, less to give in 
proportion to what it desires to receive. The adoption of the policy needed 
for the correction of the oppressive system that was denounced by the author 
of the Wealth of Nations, would bring the market home and enable it to coni- 
suuie on the land a large portion of the products of the land, its exchanges 
being chiefly made with a people whose productive power increased as fast, if not 
even faster than its own, so that instead of giving more and receiving less, it 
would be giving less and receiving more. Let the South now do this— let it 
make itself independent — and the lands of the South will speedily double in 
value, and the world will cease to be astonished by the declaration of its belief 



10 



that slavery is " a blessing," and then it will cease to hear of abolitionism 
or free-soilisin, because -harmony will then have been restored. The people 
of the South have no friends like those whom they ruin — no enemies like 
those whose favour they court. Let them look to cultivate the friendship of 
those who are willing to be their friends, and they need care little for their 
enemies. Let them fail now to do this — let them continue to compel the 
majority to obey the will of the minority — and the result must, as I think, 
be most disastrous to themselves and their institutions — to both the slave and 
his master. Their safety is to be found in the continuance of the Union, and 
in that alone, and the Union cannot be maintained if the few shall continue 
to govern the many, to the ruin of all. Review, I pray you, the whole 
proceedings of the South, and satisfy yourself, as I think you may, that every 
step it has taken during the last twenty years has tended to diminish its 
strength, and then determine whether or not I am right in asserting that it 
never can be strengthened until it shall learn to act in harmony with its only 
friends, the people of the North. 

And now let me add a few words on the tendency of public opinion on this 
subject, as manifested in the last twenty years, with a view to forming a 
judgment as to the future. 

The tariffs of '24 and '28 were the work of the always democratic Middle 
States. Gen. Jackson's faith on this subject was that of those States. He 
believed with Adam Smith, that the British system was "a manifest viola- 
tion of the most sacred rights of mankind," and a great "discouragement of 
agriculture" — that we had been too long "dependent on the policy of British 
merchants 3" and that it was our duty to provide a better market "for our 
surplus produce," by diversifying the pursuits of our people — and his opinion 
on the subject was fully and freely expressed. He transferred to his successor 
the support of a party as powerful as any that has ever yet existed in the 
Union; and yet that successor, when a candidate for re-election, received a 
most signal defeat, because he had departed from the old democratic faith. 
The election of Mr. Polk was due to representations that he was more favour- 
able to protection than Mr. Clay, and but for those representations, he would 
have been defeated He gave us the tariff of '4B, and the result of this 
subjection of the majority to the will of the minority, was seen in the elec- 
tion of General Taylor, who holds to the old democratic doctrine of the 
Middle States, which teaches now, as it has always taught, resistance to the 
British system ; and it is as a believer in that doctrine that he will be re-elected, 
if a candidate. 

The Middle States have received, and are receiving, from the tariff of '46, 
a lesson that will not be soon forgotten, while both at the North and South 
there have been great changes, and greater ones will yet take place. Many 
of the warmest friends of the tariff of '42 came, as you know, from Southern 
States whose delegations had been unanimous in their opposition to that of 
'28, and every new mill that is built makes converts, because the advantage 
of bringing the consumer to the side of the producer is thus made manifest. 
Judging of the future from the past, is there not, then, good reason to believe 
that until ice shall have conquered freedom of trade by the annihilation of the 
monopoly system by aid of which Great Britain has taxed the farmers and 
planters of the world, no candidate for the presidential office will ever receive 
a majority of the votes of the people who is not known to be honestly, and 
decidedly, favourable to the doctrine which teaches that resistance to the 
British system is as much the duty of the men of 1850, as it was of the 
men of 1776? 

Ten years of adequate protection would accomplish that object by placing 



11 



the manufacturing industry of the Union at the Lead of that of the world; 
whereas a century of the present system will fail to accomplish it. 

I pray you now to look to the fact that the only two cases in which candi- 
dates for the presidency have avowed themselves advocates of what is now 
called free trade, which consists in sustaining the English monopoly system, 
were those of Mr. Van Buren, at his second term, and of General Cass, and 
that both of them were defeated, although the nominees of a party that has 
known no other defeat in half a century — and then determine for yourself 
how long it will be before there will be another candidate for the presidential 
chair bold enough to claim popular support on the ground of his willingness to 
sustain the system which Adam Smith denounced, and against which tho 
people of '76 rebelled. 

I am yours, very truly, 



MONEY: 



A LECTURE 



DELIVERED BEFORE THE NEW YORK 



Ibgrapjjkal anfr Statistical ftwietg, 



THURSDAY, FEBRUARY, 1857. 



BY HENRY C. CAREY. 



REPRINTED FROM THE MERCHANTS' MAGAZINE FOR APRIL, 1857. 



PHILADELPHIA: 
HENRY CAREY BAIRD, 

No, 406 WALNUT ST. 

1860. 



MONET. 



1. The single commodity that is of universal request is money. Go 
where we may, we meet persons seeking commodities required for the 
satisfaction of their wants, yet widely differing in their demands. One 
needs food ; a second, clothing ; a third, books, newspapers, horses, or 
ships. Many desire food, yet while one would have fish, another rejects 
the fish and seeks for meat. Offer clothing to him who sought for ships, 
and he would prove to have been supplied. Place before the seeker after 
silks, the finest lot of cattle, and he will not purchase. The woman of 
fashion rejects the pantaloons; while the porter regards her slipper as 
wholly worthless. Of all these people, nevertheless, there would not be 
found even a single one unwilling to give labor, attention, skill, houses, 
bonds, lands, horses, or whatever else might be within his reach, in ex- 
change for money — provided, only, that the quantity offered were deemed 
sufficient. 

So has it been in every age, and so is it everywhere. Laplander and 
Patagonian, almost the antipodes of each other, are alike in their thirst after 
the precious metals. Midianite merchants paid for Joseph with so many 
pieces of silver. The gold of Macedon bought the services of Demosthenes ; 
and it was thirty pieces or silver that paid for the treason of Judas. African 
gold enabled Hannibal to cross the Alps ; as that of Spanish America has 
enabled Prance to subjugate so large a portion of Northern Africa. Sov- 
ereigns in the East heap up gold as provision against future accidents ; 
and finance ministers in the West, rejoice when their accounts enable 
them to exhibit a full supply of the precious metals. When it is other- 
wise the highest dignitaries are seen paying obsequious court to the 
Rothschild and the Baring, controllers of the supply of money. So, too, 
when railroads are to be made, or steamers to be built. Farmers and 
contractors, landowners, and stockholders, then go, cap in hand, to the 
Croesuses of Paris and London, anxious to obtain a hearing, and desiring 
to propitiate the man of power by making whatsoever sacrifice may seem 
to be required. 

2. Were a hundred ships to arrive in your port to-morrow, a single 
one of which was freighted with gold, she alone would find a place in the 
editorial columns of your journals — leaving wholly out of view the re- 
maining ninety-nine, freighted with silks and teas, cloth and sugar. The 
news, too, would find a similar place in almost all the journals of the 

3 



Money. 



Union, and for the reason, that all their readers, the "bears" excepted, 
so much rejoice when money comes in, and so much regret when it goes 
out. Of all the materials of which the earth is composed, there are none 
so universally acceptable as gold and silver — none in whose movements 
so large a portion of every community feels an interest. 

Why is this the case ? Because of their having distinctive qualities 
that bring them into direct connection with the distinctive qualities of 
man — facilitating the growth of association, and promoting the develop- 
ment of individuality. They are the indispensable instruments of society, 
or commerce. 

That they are so, would seem to be admitted by those journalists when 
giving to their movements so much publicity ; and yet, on turning to an- 
other column, you would probably find it there asserted, that all this anx- 
iety in regard to money was evidence of ignorance — the condition of man 
being improved by parting with gold that he can neither eat, drink, nor 
wear, in exchange for sugar that he can eat, and cloth that he can wear. 
Such may be the case, says one reader, but, for my part, I prefer to see 
money come in, because when it does so, I can borrow at six per cent.; 
whereas, when it is going out, I have to pay ten, twelve, or twenty. This 
is doubtless true, says another, but I prefer to see money arrive — being 
then able to sell my hats and shoes, and to pay the people who make 
them. It may be evidence of ignorance, says a third, but I always rejoice 
when money flows inwards, for then I can always sell my labor; whereas, 
when it flows outwards, I am unemployed, and my wife and children suf- 
fer for want of food and clothing. Men's natural instincts look, thus, in 
one direction, while mock science points in another. The first should be 
right, because they are given of God. The last may be wrong — being one 
among the weak inventions of man. Which is right, we may now inquire. 

3. The power of man over matter is limited to effecting changes of 
place and of form. For the one he needs wagons, horses, ships, and rail- 
roads ; for the other, spades, plows, mills, furnaces, and steam-engines. 
Among men, changes of ownership are to be effected, and for that purpose 
they need some general medium of circulation. 

The machinery of exchange in use is, therefore of three kinds — that 
required for producing changes of place, that applied to effecting changes 
of form, and that used for effecting changes of ownership ; and were we 
now to examine the course of proceeding with regard to them, we should 
find it to be the same in all — thus obtaining proof of the universality of 
the natural laws to whose* government man is subject. For the present, 
however, we must limit ourselves to an examination of the phenomena of 
the machinery of circulation. 

In the early periods of society, man has little to exchange, and there 
are few exchanges — those which are made being by direct barter — skins 
being given for knives, clothing, meat, or fish. With the progress of popu- 
lation and wealth, however, all communities have endeavored to facilitate 
the transfer of property, by the adoption of some common standard with 
which to compare the value of the commodities to be exchanged — cattle 
having thus been used among the early Greeks — while slaves and cattle, 
or " living money," as it was then denominated, were commonly in use 

4 



Money. 



among the Anglo-Saxons — wampum among our aborigines — codfish 
among the people of New England — and tobacco among those of Vir- 
ginia. With further progress, we find them adopting successively iron, 
copper, and bronze, preparatory to obtaining silver and gold, to be used 
as the machinery for effecting exchanges from hand to hand. 

For such a purpose, the recommendations of those metals are very great. 
Being scantily diffused throughout the earth, and requiring, therefore, 
much labor for their collection, they represent a large amount of value — 
while being themselves of little bulk, and therefore capable of being 
readily and securely stored, or transported from place to place. Not be- 
ing liable to rust or damage, they may be preserved uninjured for any 
length of time, and their quantity is, therefore, much less liable to varia- 
tion than is that of wheat or corn, the supply of which is so largely de- 
pendent upon the contingencies of the weather. Capable of the most 
minute subdivision, they can be used for the performance of the smallest 
as well as the largest exchanges; and we all know well how large an 
amount of commerce is effected by means of coins of one and of three 
cents that would have to remain unaffected; were there none in use of less 
value than those of five, six, and ten cents. 

To facilitate their use, the various communities of the world are accus- 
tomed to have them cut into small pieces and weighed, after which they 
are so stamped as to enable every one to discern at once how much gold 
or silver is offered in exchange for the commodity he has to sell; but the 
value of the piece is in only a very slight degree due to this process of 
coinage.* In the early periods of society, all the metals passed in lumps, 
requiring of course, to be weighed ; and such is now the case with much 
of the gold that passes between America and Europe. Gold dust has also 
to be weighed, and allowance has to be made for the impurities with 
which the gold itself is connected; but with this exception, it is of almost 
precisely the same value with gold passed from the mint and stamped with 
an eagle, a head of Victoria, or of Nicholas. 

. 4. A proper supply of those metals having been obtained, and this 
having been divided, weighed, and marked, the farmer, the miller, the 
clothier, and all other members of society, are now enabled to effect ex- 
changes, even to the exent of purchasing for a single cent their share of 
the labors of thousands, and tens of thousands, of men employed in making 
railroads, engines, and cars, and transporting upon them annually hun- 
dreds of millions of letters; or, for another cent, their share of the labor 
of the hundreds, if not thousands, of men wh» have contributed to the 
production of a penny newspaper. The mass of small coin is thus a saving 
fund for labor, because it facilitates association and combination — giving 
utility to billions of millions of minutes that would be wasted, did not a 
demand exist for them at the moment the power to labor had been pro- 
duced. Labor being the first price given for everything we value, and 

* The heap of paper in the mill becomes slightly more valuable when it is 
counted off and tied up in reams, and the heap of cloth is in like manner 
increased in value when it is measured and tied up in pieces, for the reason that 
both can be more readily exchanged. Precisely similar to this is the increase 
of value resulting from the process of coinage. 

5 



Money. 



being the commodity that all can offer in exchange, the progress of com- 
munities in wealth and influence is in the direct ratio of the presence or 
absence of an instant demand for the forces, physical and mental, of each 
and every man in the community — resulting from the existence of a power 
on the part of each and every other man, to offer something valuable in 
exchange for it. It is the only commodity that perishes at the instant of 
production, and that, if not then put to use, is lost forever. 

We are all momently producing labor-power, and daily taking in the 
fuel by whose consumption it is produced; and that fuel is wasted unless 
its product be on the instant usefully employed. The most delicate fruits 
or flowers may be kept for hours or days ; but the force resulting from 
the consumption of food cannot be kept, even for a second. That the in- 
stant power of profitable consumption may be coincident with the instant 
production of this universal commodity, there must be incessant combina- 
tion, followed by incessant division and subdivision, and that in turn fol- 
lowed by an incessant recomposition. This is seen in the case above 
referred to, where miners, furnace-men, machine-makers, rag-gatherers, 
carters, bleachers, paper-makers, railroad and canal men, type-makers, 
compositors, pressmen, authors, editors, publishers, newsboys, and hosts of 
others, combine their efforts for the production in market of a heap of 
newspapers that has, at the instant of production, to be divided off into 
portions suited to the wants of hundreds of thousands of consumers. Each 
of these latter pays a single cent — then perhaps subdividing it among 
half a dozen others, so that the cost is perhaps no more than a cent per 
week; and yet each obtains his share of the labors of all of the persons by 
whom it had been produced. 

Of all the phenomena of society, this process of division, subdivision, com- 
position, and recomposition is the most remarkable; and yet — being a 
thing of such common occurrence — it scarcely attracts the slightest no- 
tice. Were the newspaper above referred to, partitioned off into squares, 
each representing its portion of the labor of one of the persons who had 
contributed to the work, it would be found to be resolved into six, eight, 
or perhaps even ten thousand pieces, of various sizes, small and great — 
the former representing the men who had mined and smelted the ores of 
which the types and presses had been composed, and the latter the men 
and boys by whom the distribution has been made. Numerous as are 
these little scraps of human effort, they are nevertheless, all combined in 
every sheet, and every member of the community may — for the trivial 
sum of fifty cents per annum — enjoy the advantage of the information 
therein contained; and as fully as he could do, had it been collected for 
himself alone. 

Improvements in the mode of transportation are advantageous to man, 
but the service they render, when compared with their cost is very small. 
A ship worth forty or fifty thousand dollars cannot effect exchanges be- 
tween men at opposite sides of the Atlantic to an extent exceeding five 
or six thousand tons per annum ; whereas, a furnace of similar cost will 
effect the transmutation of thirty thousand tons' weight of coal, ore, lime- 
stone, food, and clothing, into iron. Compared with either of these, how- 
ever, the commerce effected by the help of fifty thousand dollars' worth 



Money. 



of little white pieces representing labor to the extent of three or five cents 
— labor which by their help is gathered up into a heap, and then divided 
and subdivided day after day throughout the year — and it will be found 
that the service rendered to society, in economizing force, by each dollar's 
worth of money, is greater than is rendered by hundreds, if not thousands, 
employed in manufactures, or tens of thousands in ships or railroads ; and 
yet there are able writers who tell us that money is so much " dead capi- 
tal" — being " an important portion of the capital of a country that pro- 
duces nothing for the country." 

"Money, as money," says an eminent economist, " satisfies no want, an- 
swers no purpose. * * The difference between a country with money, 
and a country altogether without it, would," as he thinks, "be only one of 
convenience, like grinding by water instead of by hand." A ship, as a 
ship — a road, as a road — a cotton-mill, as a cotton-mill — in like manner, 
however, "satisfies no want, answers no purpose." They can be neither 
eaten, drunk, nor worn. All, however, are instruments for facilitating the 
work of association, and the growth of man in wealth and power is in the 
direct ratio of the facility of combination with his follow-men. To what 
extent they do so, when compared with money, we may now inquire. To 
that end, let us suppose that by some sudden convulsion of nature all the 
ships of the world were at once annihilated, and remark the effect pro- 
duced. The ship-owners would loose heavily ; the sailors and the porters 
would have less employment ; and the price of wheat would temporarily 
fall; while that of cloth would, for the moment rise. At the close of a 
single year, by far the larger portion of the operations of society would 
be found moving precisely as they had done before — commerce at home 
having taken the place of that abroad. Cotton and tropical fruits would 
be less easily obtained in Northern climes, and ice might be more scarce 
in Southern ones ; but, in regard to the chief exchanges of a society like 
our own, there would be no suspension, even for a single instant. So far, 
indeed, would it be to the contrary, that in many countries commerce 
would be far more active than it had been before — the loss of ships pro- 
ducing a demand for the opening of mines, for the construction of furnaces 
and engines, and for the building of mills, that would make a market for 
labor, mental and physical, such as had never before been known. 

Let us next suppose that the ships had been spared, and that all the 
gold and silver, coined and not coined, mined and not mined, were anni- 
hilated, and study the effect that would be produced. The reader of 
newspapers — finding himself unable to pay for them in beef or butter, 
cloth or iron — would be compelled to dispense with his usual supply of 
intelligence, and the journal would be no longer printed. Omnibuses 
would cease to run for want of sixpences ; and places of amusement would 
be closed, for want of shillings. Commerce among men would be at an 
end, except so far as it might be found possible to effect direct exchanges, 
food being given for labor, or wool for cloth. Such exchanges could, 
however, be few in number, and men, women, and children would perish 
by millions, because of inability to obtain food and clothing in exchange 
for service. Cities whose population now counts by hundreds of thou- 
sands would, before the close of a single year, exhibit hundreds of blocks 

7 



Money. 



of unoccupied buildings, and the grass would grow in their streets. A 
substitute might, it is true, be found — men returning to the usages of 
those primitive times when wheat or iron, tobacco or copper, constituted 
the medium of exchange; but under such circumstances, society, as at 
present constituted, could have no existence. A pound of iron would be 
required to pay for a Tribune or a Herald, and hundreds of tons of any 
of the commodities above referred to, would be needed for the purchase 
of the weekly emission of either. Tons of them would be needed to pay 
for the food consumed in a single eating-house, or the amusement fur- 
nished in a single theatre; and how the wheat, the iron, the com, or the 
copper could be fairly divided among the people who had contributed to 
the production of the journal, the food, or the amusement, would be a 
problem entirely incapable of solution. 

The precious metals are to the social body what atmospheric air is to 
the physical one. Both supply the machinery of circulation, and the re- 
solution of the physical body into its elements when deprived of the one 
is not more certain than is that of the social body when deprived of the 
other. In both these bodies the amount of force is dependent upon the 
rapidity of circulation. That it may be rapid, there must be a full supply 
of the machinery by means of which it is to be effected ; and yet there 
are distinguished writers who mourn over the cost of maintaining the cur- 
rency, as if it were altogether lost, while expiating on the advantages of 
canals and railroads — not perceiving, apparently, that the money that can 
be carried in a bag, and that scarcely loses in weight with a service of 
half a dozen years, effects more exchanges than could be effected by a 
fleet of ships, many of which would be rotting on the shores on which 
they had been stranded, at the close of such a period of service, while the 
remainder would already have lost half of their original value.* 

Of all the labor-saving machinery in use, there is none that so much 
economizes human power, and so much facilitates combination, as that 
known by the name of money. Wealth, or the power of man to com- 
mand the services of nature grows with every increase in the facility of 
combination — this latter growing with the growth of the ability to com- 
mand the aid of the precious metals. Wealth, then, should increase most 
rapidly where that ability is most complete. 

5. The power of a commodity to command money in exchange is 
called its price. Prices fluctuate with changes of time and place — wheat 
being sometimes low, and at others high — and cotton commanding in one 
country thrice the quantity of silver that would be given for it in another. 
In one place, much money is required to be given for a little cloth ; 
whereas, in another, much cloth may be obtained for little money. What 
are the causes of all these differences, and what the circumstances which 
tend to affect prices generally, we may now inquire. 

* A three-cent piece, changing hands ten times in a day, effects exchanges in 
a year to the extent of $100 ; or, if we take both sides of the exchanges, to that 
of $200. Two thousand such pieces — costing $60 — engaged in circulating bread 
at home, are capable of maintaining a greater amount of commerce than can be 
maintained by a ship that has cost $30,000, engaged in effecting exchanges 
between the producers of cloth in Manchester and tea in China. 

8 



Money. 



A thousand tons of rags at the Rocky Mountains would not exchange 
for a piece of silver of the smallest conceivable size j whereas, a quire of 
paper would command a piece so large that it would weigh an ounce, 
Passing thence eastward, and arriving in the plains of Kansas, their rela- 
tive values, measured in silver, would be found so much to have changed, 
that the price of the rags would pay for many reams of the paper. Com- 
ing to St. Louis, a further change would be experienced — rags having 
again risen and paper having again fallen. Such, too, would prove to be 
the case at every stage of the progress eastward — the raw material steadily 
gaining, and the finished commodity losing, in price, until, at length, in 
the heart of Massachusetts, three pounds of rags would be found to com- 
mand more silver than would be needed for the purchase of a pound of 
paper. The changes of relation thus observed are exhibited in the fol- 
lowing diagram : — 



Rags. 




The price of raw materials tends to rise as we approach those places in 
which wealth most exists — those in which man is most enabled to associate 
with his fellow-man, for obtaining power to direct the forces of nature to 
his service. The prices of finished commodities move in a direction ex- 
actly opposite — tending always to decline as those of raw materials advance. 
Both tend thus to approximate — the highest prices of the one being always 
found in connection with the lowest of the other ; and in the strength of 
the movement in that direction will be found the most conclusive evidence 
of advancing civilization and growing commerce. 

That all the facts are in entire accordance with this view, will be obvi- 
ous to those who remark that cotton is low in price at the plantation, and 
high in Manchester or Lowell ; whereas, cloth is cheaper in Lowell than 
it is in Alabama or Louisiana. Corn, in Illinois, is frequently so cheap 
that a bushel is given in exchange for the silver required to pay for a yard 
of the coarsest cotton cloth ; whereas, at Manchester, it is so dear that it 
pays for a dozen yards. The English farmer profits doubly — obtaining 
much cloth for his corn, while increasing the quantity of corn by help of 
the manure that is furnished by his competitor of the West. The latter 
loses doubly — giving much corn for little cloth, and adding thereto the 
manure yielded by the consumption of his corn, to the loss of which is 
due the unceasing diminution of the powers of his land. 

Looking backward in time, we obtain results precisely similar to those 

9 



Money. 



obtained in passing from countries in which associated men are found, and 
in which, consequently, wealth abounds, to those in which they are widely 
scattered, and in which they are, therefore, weak and poor. At the close 
of the fifteenth century, eight ecclesiastics, attending the funeral of Anne 
of Brittany, were royally entertained at a cost of 3.13 francs, of money of 
our time; while the silk used on that occasion is charged at 25 francs. 
The same quantity of silk could now be purchased for less than a franc 
and a half — a sum that would be entirely insufficient to pay for a single 
dinner. The owner of four quires of paper could then obtain for it more 
money than was required for the purchase of a hog, and less than two 
reams were needed for that of a bull. In England, hogs, sheep, and corn 
were cheap, and were exported, while cloth was dear, and was therefore 
imported. Coming down to a more recent period, the early portion of 
the last century, we find that corn and wool were cheap, while cloth and 
iron were dear ; whereas, at the close of the century, the former were 
becoming dearer from day to day, while the latter were as regularly be- 
coming cheaper. 

6. Raw material tends, with the progress of men in wealth and civiliza- 
tion, to rise in price. What, however, is raw material ? In answer to 
this question, we may say, that all the products of the earth are, in their 
turn, finished commodity and raw material. Coal and ore are the finished 
commodity of the miner, and yet they are only the raw material of which 
pig-iron is made. The latter is the finished commodity of the smelter, 
and yet it is but the raw material of the puddler, and of him who rolls 
the bar. The bar, again, is the raw material of sheet-iron — that, in turn, 
becoming the raw material of the nail and the spike. These, in time, 
become the raw material of the house, in the diminished cost of which 
are found concentrated all the changes that have been observed in the 
various stages of passage from the rude ore — lying useless in the earth — 
to the nail and the spike, the hammer and the saw, required for the com- 
pletion of a modern dwelling. 

In the early and barbarous ages of society, land and labor are very low 
in price, and the richest deposits of coal and ore are worthless. Houses 
being then obtained with exceeding difficulty, men are forced to depend 
for shelter against wind and rain upon holes and caves they find existing 
in the earth. In time, they are enabled to combine their efforts; and 
with every step in the course of progress, land and labor acquire power 
to command money in exchange, while the house loses it. As the ser- 
vices of fuel are more readily commanded, pig-iron is more easily obtained. 
Both, in turn, facilitate the making of bars and sheets, nails and spikes, 
and all of these facilitate the creation of boats, ships, and houses ; but 
each and every of these improvements tends to increase the prices of the 
original raw materials — land and labor. At no period in the history of 
the world has the general price of these latter been so high as in the 
present one ; at none would the same quantity of money have purchased 
so staunch a boat, so fleet a ship, or so comfortable a house. 

The more finished a commodity, the greater is the tendency to a fall of 
price — all the economies of the earlier processes being accumulated to- 
gether in the later ones. Houses, thus, profit by all improvements in the 

10 



Money. 



making of bricks, in the quarrying of stone, in the conversion of lumber, 
and in the working of the metals. So, too, is it with articles of clothing 
— every improvement in the various processes of spinning, weaving, and 
dyeing, and in the conversion of clothing into garments, being found 
gathered together in the coat — the more numerous those improvements, 
the lower beiDg its price, and the higher that of the land and labor to 
which the wool is due. 

With every stage of progress in that direction, there is an increasing 
tendency towards an equality in the prices of the more and the less fin- 
ished commodities — and towards an approximation in the character of the 
books, clothing, furniture, and dwellings of the various portions of society; 
with constant increase in power to maintain commerce between those 
countries which do, and those which do not, yield the metals which con- 
stitute the raw material of money. 

For proof of this, we may look to any of the advancing communities of 
the world. In the days when the French peasant would have been re- 
quired to give an ox for a ream and a half of paper, wine was much higher 
than it is at present — peaches were entirely unattainable — the finer vege- 
tables now in use were utterly unknown — a piece of refined sugar, or a cup 
of tea or coffee, were luxuries fit for kings alone — and an ell of Dutch 
linen exchanged for the equivalent of 60 francs — $11 25. Now — the 
price of meat having wonderfully increased — the farm laborer is better 
paid; and the consequences are seen in the fact, that with the price of an 
ox the farmer can purchase better wine than then was drunk by kings — 
that he can obtain not only paper, but books and newspapers — that he 
can eat apricots and peaches — that sugar, tea, and coffee have become 
necessaries of life — and that he can have a supply of linen which would, 
in earlier times, have almost sufficed for the entire household of a noble- 
man. Such are the results of an increase in the facility of association 
and combination among men ; and if we now desire to find the instrument 
to which they are most indebted for the power to combine their efforts, we 
must look for it in that to which we have given the name of money. Such 
being the case, it becomes important that we ascertain what are the cir- 
cumstances under which the power to command the use of that instrument 
increases, and what are those under which it declines. 

7. To acquire dominion over the various natural forces provided for hi3 
use, is both the pleasure and the duty of man ; and the greater the amount 
acquired, the higher becomes his labor, and the greater is the tendency to 
increase of power. With each addition thereto, he finds less resistance 
to his further efforts ; and hence it is, that each successive discovery 
proves to be but the precursor of newer and greater ones. Franklin's 
lightning-rod was but the preparation for the telegraph-wires that connect 
our cities ; and they, in turn, are but the precursors of those destined 
soon to enable us to read, at the breakfast-table, an account of the occur- 
rences of the previous day in Europe, Asia, and Australia. Each succes- 
sive year thus augments the power of man, and with every new discovery 
utility is given to forces that now are being wasted. The more they are 
utilized — the more nature is made to labor in man's service — the less is 
the quantity of human effort required for the reproduction of the com- 



Money. 



modities needed for his comfort, convenience, or enjoyment — the less is 
the value of all previous accumulations— and the greater is the tendency 
towards giving to the labor of the present, power over the capital created 
by the labors of the past. 

Utility is the measure of man's power over nature. The greater it is, 
the larger is the demand for the commodity or thing utilized, and the 
greater the attractive force exerted upon it, wherever found. Look where 
we may, we see that every raw material yielded by the earth tends towards 
those places at which it has the highest utility, and that there it is the 
value of the finished article is least.* Wheat tends towards the grist- 
mill, and there it is that flour is cheapest. Cotton and wool tend towards 
the mills at which they are to be spun and woven, and there it is that the 
smallest quantity of money will purchase a yard of cloth. On the other 
hand, it is where cotton has the least utility — on the plantation — that 
cloth has the highest value. Therefore it is, that we see communities so 
universally prospering when the spindle and the loom are brought to the 
neighborhood of the plough and the harrow, to utilize their products. 

Precisely similar to this are the facts observed in regard to the precious 
metals, everywhere on the earth's surface seen to be tending towards those 
places at which they have the highest utility — those at which men most 
combine their efforts for utilizing the raw products of the earth — those in 
which land most rapidly acquires a money value, or price — those, there- 
fore, in which the value of those metals, as compared with land, most 
rapidly diminishes — and those in which the charge for the use of money 
is lowest. They tend to leave those places in which their utility is small, 
and in which combination of action least exists — those, therefore, in which 
the price of land is low, and the rate of interest high. In the first, there 
is a daily tendency towards increase in the freedom of man ; whereas, in 
the last, the tendency is in the opposite direction — towards the subju- 
gation of man to the control of those who live by the expenditure of taxes, 
rent, and interest. Desiring evidence of this, we have but to look around 
us at the present moment, and see how oppressively rent and interest ope- 
rate upon the poorer portions of society — how numerous are the applica- 
tions for the smallest office — and, above all, how great has been the increase 
of pauperism in the past three years, in which our exports of specie have 
been so large. 

Looking to Mexico or Peru, to California or Siberia, we see but little 
of that combination of action required for giving utility to their metallic 
products — little value in land — and interest higher than in any other or- 
ganized communities in the world. Following those products, we see them 
passing gradually through the West, towards the cities of the Atlantic, or 
through Russia to St. Petersburg — every step of their progress being to- 
wards those States or countries in which they have the greatest utility — 
those in which combination of action most exists, and in which, therefore, 
man is daily acquiring power over the various forces of nature, and com- 

* Value is the measure of the obstacle interposed by nature to the gratification 
of the wishes of man. 

12 



Money. 



pelling her more and more to aid him in his efforts for the attainment of 
further power. 

8. For more than a century, Great Britain constituted the reservoir 
into which was discharged the major part of the gold and silver produced 
throughout the world. There it was, that the artisan and the farmer were 
most nearly brought together — the power of association most existed — 
the ultimate raw materials of commodities, land and labor, were most 
utilized, and the consumption in the arts, of gold and silver, was the great- 
est.* Now the state of things is widely different. From year to year, 
the land of the United Kingdom has become more consolidated — the little 
proprietor having been superseded by the great middleman farmer, and 
the mere day-laborer ; and the result is seen in the fact, that Great Brit- 
ain has passed from beirjg a place at which commodities are produced, to 
be given in exchange for the produce of other lands — to being a mere 
place of exchange for the people of those lands. With each successive 
year, there is a decline in the proportion borne to the whole population 
by the producing classes, and an increase in that borne by the non-pro- 
ducing ones, with corresponding diminution in the power to retain the 
products of the mines of Peru and Mexico. 

The gold of California does not, as we know, to any material extent, re- 
main among ourselves. Touching our Atlantic coast, only to be transferred 
to steamers that bear it off to Great Britain, it there meets the product of 
the Australian mines — the two combined amounting to more than a hun- 
dred millions of dollars a year. Both come there, however, merely in 
transit — being destined, ultimately, to the payment of the people of Con- 
tinental Europe, who have supplied raw products that have been converted 
and exported, or finished ones that have been consumed. Much of it goes 
necessarily to France, whose exports have grown, in the short period of 
twenty years, from 500,000,000 francs, to 1,400,000,000, and have steadily 
maintained their commercial character. Manufactures are there the hand- 
maids of agriculture; whereas in the United Kingdom, they are, with 
each successive year, becoming more and more the substitutes for it. To 
a small quantity of cotton, silk, and other raw products of distant lands, 
France adds a large amount of the produce of her farms — -thus entitling 
herself not only to receive, but to retain for her own uses and purposes, 
nearly all the commodities that come to her from abroad. Her position 
is that of the rich and enlightened farmer, who sells his products in their 
highest form — thus qualifying himself for applying to the support of his 
family, the education of his children, and the improvement of his land, 
the Ichole of the commodities received in exchange. That of Britain is the 
position of the trader, who passes through his hands a large amount of 
property, of which he is entitled to retain the amount of his commission, 
and nothing more. The one has immense, and wonderfully growing com- 
merce, while the other performs a vast amount of trade. 

9. The precious metals are steadily flowing to the north and east of 
Europe, and among the largest of their recipients we find Northern Ger- 

* Thirty years since, the annual consumption of the precious metals in Great 
Britain was estimated at £2,500,000, or $12,000,000. 

13 



Money. 



many, now so rapidly advancing in wealth, power, and civilization. Den- 
mark and Sweden, Austria and Belgium, following in the lead of France, 
in the maintenance of the policy of Colbert, are moving in the same di- 
rection; and the consequences are seen in a growing habit of association, 
attended with daily augmentation in the amount of production, and in the 
facility of accumulation, as exhibited in the building of mills, the opening 
of mines, the construction of roads, and the constantly augmenting power 
to command the services of the precious metals. 

The causes of these phenomena are readily explained. Raw materials 
of every kind tend towards those places at which employments are most 
diversified, because there it is that the products of the farm command the 
largest quantity of money. Gold and silver follow in the train of raw 
materials ; and for the reason, that where the farmer and the artisan are 
most enabled to combine, finished commodities are always cheapest. When 
Germany exported corn and wool, they were cheap, and she was required 
to export gold to aid in paying for the cloth and paper she imported; be- 
cause they were very dear. Now she imports both wool and rags ; her 
farmers obtain high prices for their products, and are enriched ; and the 
gold comes to her, because cloth and paper are so cheap that she sends 
them to the most distant quarters of the world. So is it with France, 
Belgium, Sweden, and Denmark — all of which are large importers of raw 
materials, and of gold. In all those countries, raw materials rise in price ; 
and the greater the tendency to rise, the more rapidly must the current of 
the precious metals set in that direction. The country that desires to in- 
crease its supplies of gold, and thus lower the price of money, is, therefore, 
required to pursue that course of policy tending most to raise the prices 
of raw material, and lower those of manufactures. This, however, is di- 
rectly the opposite of the policy advocated by the British school, which 
seeks, in the cheapening of all the raw material of manufactures, the means 
of advancing civilization. 

10. The reverse of what is above described is found in Ireland, Turkey, 
and Portugal, so long the close allies of England—and so uniformly fol- 
lowing in the course of policy now advocated by her economists. From 
each and all of them, there has been an unceasing drain of money — - 
the disappearance of the precious metals having been followed by decline 
in the productiveness of agriculture — in the prices of commodities, in the 
value of land, and in the power of man. 

France in the decade prior to the Eden treaty in 1786, was advancing 
in both manufactures and commerce with great rapidity, as is shown con- 
clusively in M. de Tocqueville's recent work.* Raw materials and the'pre- 

* " Simultaneous with these changes in the minds of governed and governors, 
public prosperity began to develop with unexampled strides. This is shown by 
all sorts of evidence. Population increased rapidly ; wealth more rapidly still. 
The American war did not check the movement — it completed the embarrass- 
ment of the State, but did not impede private enterprise ; individuals grew more 
industrious, more inventive, richer than ever. 

"An official of the time states that in 1774 'industrial progress had been so 
rapid that the amount of taxable articles had largely increased.' On comparing 
the various contracts made between the State and the companies to which the 

14 



Money. 



cious metals flowing in, and manufactured goods flowing out, the result 
was seen in a daily increasing tendency towards the division of land, the 
improvement of agriculture, and the increase of human freedom. From 
the date of that treaty, however, all was changed. Manufactures flowed 
in, and gold flowed out, with daily decline in the power of association, in 
the wages of labor, and in the value of land. Universal distress producing 
a demand for change of policy, its effect was seen in the calling together 
of the States- General, whose appearance on the stage for the first time in 
a hundred and eighty years, was so soon to be followed by a revolution, 
that sent to the guillotine the most of those by whom that treaty had 
been made. 

Looking to Spain, we see her poverty to have steadily increased from 
the hour, when, by expelling her manufacturing population, she rendered 
herself dependent upon the workshops of other countries. Mistress of 
Mexico and Peru, she acted merely as the conduit through which their 
wealth passed to the advancing countries of the world, as is now the case 
with Great Britain and the United States. 

Turning next to Mexico, we see her to have been declining steadily in 
power from the day on which she obtained her independence ; and for the 
reason, that from that date her manufactures began to disappear. From 
year to year she becomes more and more dependent upon the trader, and 
more and more compelled to export her commodities in their rudest state ; 
as a necessary consequence of which, her power to retain the produce of 
her mines is constantly diminishing. 

11. The facts thus far presented, may now be embodied in the follow- 
ing propositions : — 

Raw materials tend towards those countries in which employments are 
most diversified — in which the power of association most exists — and in 
which land and labor tend most to rise in price. 

The precious metals tend towards the same countries ; and for the rea- 
son, that there it is that finished commodities are least in price. 

The greater the attractive force exerted upon those raw materials and 
this gold, the more does agriculture tend to become a science — the larger 
are the returns to agricultural labor — the more steady and regular becomes 
the motion of society — the more rapid is the development of the powers 
of the land, and of the men by whom it is occupied — the larger is the 
commerce — and the greater the progress towards happiness, wealth, and 
power. 

Raw materials tend from those countries in which employments are least 

taxes were farmed out, at different periods during the reign of Louis XVI., one 
perceives that the yield was increasing with astonishing rapidity. The lease of 
1786 yielded fourteen millions more than that of 1780. Necker, in his report of 
1781, estimated that 'the produce of taxes on articles of consumption increased 
at the rate of two millions a year. 

"Arthur Young states that in 1788 the commerce of Bordeaux was greater than 
that of Liverpool, and adds that 1 of late years maritime trade has made more 
progress in France than in England ; the whole trade of France has doubled in 
the last twenty years.' " — De Tocqueville, The Old Regime and the Revolution, 
p. 210. 

.15 



Money. 



diversified — those in which the power of combination least exists — and 
those consequently, in which land and labor are least in price. 

The precious metals, too, tend to leave those countries, because there it 
is that finished commodities are dearest. 

The greater the expulsive force that is thus exhibited, the slower is the 
circulation of society, and the smaller is the amount of commerce — the 
more rapid is the exhaustion of the soil — the lower is the condition of 
agriculture — the less is the return to the labors of the field — the lower 
are the prices of the products of the farm — the less is the regularity of the 
motion of society — the greater is the power of the trader — and the stronger 
is the tendency towards pauperism and crime among the people, and to- 
wards weakness in the government. 

The portions of the world from which the precious metals flow, in which 
agriculture declines, and men become less free, are those which follow in 
the lead of England — preferring the supremacy of trade to the extension 
of commerce — Ireland, Turkey, Portugal, India, Carolina, and other ex- 
clusively agricultural countries. 

The portions towards which they flow are those which follow in the lead 
of France — preferring the extension of commerce to the enlargement of 
the trader's power. Germany and Denmark, Sweden and New England, 
are in this position. In all of these agriculture becomes more and more 
a science, as employments become diversified — the returns to agricultural 
labor increasing as the prices of raw materials tend to rise. 

In all the countries to which they flow, the prices of raw materials and 
those of finished commodities tend to approximate — the farmer giving a 
steadily diminishing quantity of wool and corn in return for a constant 
quantity of cloth and iron. 

In those from which they flow, those prices become from year to year 
more widely separated — the farmer and the planter giving a steadily in- 
creasing quantity of wool and com for a diminishing quantity of iron, or 
of cloth. 

Such are the facts presented by the history of the outer world, of both 
the present and the past. How far they are in accordance with our own 
experience we may now inquire. 

12. The mining communities of the world having raw products to sell, 
and needing to purchase finished commodities, the gold and silver they 
produce flow naturally to those countries that have such commodities to 
sell ; and not towards those which have only raw materials to offer in ex- 
change. India has cotton to sell ; Ireland and Turkey have grain : Brazil 
has sugar and coffee ; while Alabama has only cotton ; for which reason 
it is that money is always scarce in those countries, and the rate of interest 
high. Looking homeward, we find that whenever our policy has tended 
towards the production of combination of action between the farmer and 
the artisan, we have been importers of the precious metals, and that then 
land and labor have risen in price. The contrary effect has invariably been 
produced, whenever our policy has tended to the diminution of association, 
and the production of a necessity for looking abroad for making all our 
exchanges of food and wool for cloth and iron — limited, however, for the 
period immediately following the change, by the existence of a credit that 

16 



Money. 



has enabled us to run in debt to Europe, and thus for a time to arrest the 
export of the precious metals. What was the precise course of the trade 
in those metals during the thirty years preceding the discovery of the 
California gold deposits, is shown by the following figures : — 



Excess exports. Excess imports. 

1821—1825 .... $12,500,000 

1826—1829 .... $4,000,000 

1830—1834 .... 20,000,000 

1835—1838 .... 34,000,000 

1839—1842 .... 9,000,000 

1843—1847 .... 39,000.000 

1848—1850 .... 14,000,000 



In the closing years of the free trade system of 1817, the average 
excess of specie export was about $2,500,000 a year. To this adding a 
similar amount, only, for the annual consumption, we obtain an absolute 
diminution of five-and-twenty millions, while the population had increased 
about ten per cent. Under such circumstances, it is no matter of surprise 
that those years are conspicuous among the most calamitous ones in our 
history. At Pittsburg, flour then sold at 81 25 per barrel; wheat, through- 
out Ohio, would command but 20 cents a bushel ; while a ton of bar iron 
required little short of eighty barrels of flour to pay for it. Such was the 
state of affairs that produced the tariff of 1824 — a very imperfect mea- 
sure of protection, but one that, imperfect as it was, changed the course of 
the current, and caused a net import, in the four years that followed, of 
$4,000,000 of the precious metals. In 1828, there was enacted the first 
tariff tending directly to the promotion of association throughout the 
country ; and its effects exhibit themselves in an excess import of the pre- 
cious metals — averaging 81,000,000 a year — notwithstanding the discharge; 
in that period, of the whole of the national debt that had been held in 
Europe, amounting to many millions. Putting together the discharge of debt 
and the import of coin, the balance of trade in that period must have been 
in our favor to the extent of nearly $50,000,000 ; or an average of about 
$10,000,000 a year. As a consequence, prosperity existed to an extent 
never before known — the power to purchase foreign commodities growing 
with such rapidity as to render it necessary greatly to enlarge the free list; 
and then it was that coffee, tea, and many other raw commodities, were 
emancipated from the payment of any impost. Thus did efficient protec- 
tion lead to a freedom of commerce, abroad and at home, such as had never 
before existed. 

The first few years of the compromise tariff of 1833 profited largely by 
the prosperity caused by the act of 1828, and the reductions under it were 
then so small that its operation was but slightly felt. In those years, too, 
there was contracted a considerable foreign debt — stopping the export of 
specie, and producing an excess import averaging more than 88,000,000 a 
year. Prosperity seemed to exist, but it was of the same description that 
has marked the last few years, during which the value of all property has 
depended entirely upon the power to contract debts abroad — thus placing 
the nation more completely under the control of its distant creditors. 
2 17 



Money, 



In the succeeding years, the compromise became more fully operative.* 
Furnaces and factories were closed, with constantly increasing necessity 
for looking abroad for the performance of all exchanges, and correspond- 
ing necessity for remitting money to pay the balance due on the purchases 
of previous years. Nevertheless, the annual specie export averaged little 
more than $2,000,000 ; but if to this be added a consumption of only 
$3,000,000 a year, we have a reduction of $20,000,000; the consequences 
of which were seen in almost total suspension of commerce. The whole 
country was in a state of ruin. Laborers were everywhere out of em- 
ployment, and being still consumers, while producing nothing, the power 
of accumulation ceased almost to exist. Debtors being everywhere at the 
mercy of creditors, sales of real estate were chiefly accomplished by help 
of sheriffs, whose employments were then more productive than they had 
been from the date of the constitution. 

The change in the value of labor, consequent upon the stoppage of the 
circulation that followed this trivial export of the precious metals, cannot 
be placed at less than $500,000,000 a year. Wages were low, even where 
employment could be obtained ; but a large portion of the labor-power of 
the country was totally wasted, and the demand for mental power dimi- 
nished even more rapidly than that for physical exertion. In the prices of 
land, houses, machinery of all kinds, and other similar property, the re- 
duction counted by thousands of millions of dollars; and yet, the difference 
between the two periods ending in 1833 and 1842, in regard to the mone- 
tary movement, was only that between an excess import of $5,000,000, 
and an excess export of $2,500,000, or a total of $7,500,000 a year. No 
one who studies these facts, can fail to be struck with the wonderful power 
over the fortunes and conditions of men exerted by the metals provided 
by the Creator for furthering the work of association among mankind. 
With the small excess of import in the first period, there was a steady 
tendency towards equality of condition among the poor and the rich, the 
debtor and the creditor ; whereas, with the slight excess of export in the 
second one, there was a daily increasing tendency towards inequality— the 
poor laborer and the debtor, passing steadily more under the control of 
the rich employer, and the wealthy creditor. Of all the machinery fur- 
nished for the use of man, there is none so equalizing in its tendency as 
that known by the name of money; and yet economists would have the 
world believe that the agreeable feeling which everywhere attends a know- 
ledge that it is flowing in, is evidence of ignorance — any reference to 
the question of the favorable or unfavorable balance of trade being 
beneath the dignity of men who feel that they are following in the foot- 
steps of Hume and Smith. It would, however, be as difficult to find a 
single prosperous country that is not, from year to year, making itself a 
better customer to the gold-producing countries, as it would be to find one 
that is not becoming a better customer to those which produce silk, or 

* One-tenth of the excess over 20 per cent, was reduced in December, 1833, 
another tenth in 1835, a third in 1837, and a fourth in 1839 ; the remaining ex- 
cess of duties being then equally divided into two parts, to be reduced in 1841 
and 1842. 

18 



Money. 



cotton. To an improving customer, there must be in its favor a steadily 
increasing balance of trade, to be settled by payment in the commodity 
for whose production the country is fitted, whether that be cloth, or to- 
bacco, silver or gold. 

The condition of the nation at the date of the passage of the act of 1842, 
was humiliating in the extreme. The treasury — unable to obtain at home 
the means required for administering the government, even on the most 
economical scale — had failed in all its efforts to negotiate a loan at six per 
cent., even in the same foreign markets in which it had but recently paid 
off, at par, a debt bearing an interest of only three per cent. Many of 
the States, and some even of the oldest of them, had been forced to sus- 
pend the payment of interest on their debts. The banks, to a great extent, 
were in a state of suspension, and those which professed to redeem their 
notes, found their business greatly restricted by the increasing demand 
for coin to go abroad. The use of either gold or silver as currency had 
almost altogether ceased. The Federal government, but recently so rich, 
was driven to the use of inconvertible paper money, in all its transactions 
with the people. Of the merchants, a large portion had become bankrupt. 
Factories and furnaces being closed, hundreds of thousands of persons were 
totally unemployed. Commerce had scarcely an existence — those who 
could not sell their own labor, beiug unable to purchase of others. Never- 
theless, deep as was the abyss into which the nation had been plunged, so 
magical was the effect of the adoption of a system that had turned the 
balance of trade in its favor, that scarcely had the act of August, 1812, 
become a law, when the government found that it could have all its wants 
supplied at home. Mills, factories, and furnaces, long closed, were again 
opened; labor came again into demand; and, before the close of its third 
year, prosperity almost universally reigned. States recommenced the pay- 
ment of interest on their debts. Railroads and canals again paid dividends. 
Real estate had doubled in value, and mortgages had been everywhere 
lightened ; and yet the total net import of specie in the first four of the 
years, was but $17,000,000, or $4,250,000 per annum ! In the last year 
occurred the Irish famine, creating a great demand for food ; the conse- 
quence of which was, an import of no less than $22,000,000 of gold — 
making a total import, in five years, of $39,000,000. Deducting from 
this but $4,000,000 per annum for consumption, it leaves an annual in- 
crease, for the purposes of circulation, of less than $5,000,000 ; and yet 
the difference in the prices of labor and land in 1847, as compared with 
1842, would be lowly estimated, if placed at only $2,000,000,000. 

With 1847, however, there came another change of policy — the nation 
being again called upon to try the system under which it had been pros- 
trated in lS40-'42. The doctrines of Hume and Smith, in reference to 
the balance of trade, were again adopted as those by which a government 
was to be directed in its movements. Protection being then repudiated, 
the consequences were speedily seen in the fact, that within three years, 
factories and furnaces were again closed, labor was seeking demand, and 
gold was flowing out even more rapidly than it had come in under the 
tariff of 1842. The excess export of those three years amounted to 
$14,000,000; and if to this be added $15,000,000 for consumption, it 
4 19 



Money. 



follows that tbe reduction was equal to the total increase under the previ- 
ous system. Circulation was everywhere being suspended, and a crisis 
was close at hand, when, fortunately for the advocates of the existing sys- 
tem, the gold deposits of California were brought to light. 

In the year 1850— '51, the quantity received from that source was more 
than $40,000,000, of which nearly $20,000,000 were retained at home. 
The consequence was speedily seen in a reduction of the rate of interest, 
and a re-establishment of commerce. In the following year, $37,000,000 
were exported, leaving, perhaps, $8,000,000 or $10,000,000, which, added 
to that retained in 1851, made an addition to the currency of probably 
$30,000,000 — -producing universal life and motion. In 1852-'53, there 
was still a. slight increase, but in the two years following, the export was 
$97,000,000 ; and if to this we add a domestic consumption that probably 
was but little short of $20,000,000, we obtain a total amount withdrawn 
exceeding the receipt from all the world. Looking now to the Union east 
of the Rocky Mountains, it may well be doubted if the effective addition to 
the stock of the precious metals remaining in the form of coin much exceeds 
a single dollar pef head of the population.* It may amount to $30,000,000 
or $35,000,000; and small as is that sum, it would have produced a great 
effect in promoting rapidity of circulation, had it not been that, simulta- 
neously therewith, the indebtedness to foreign countries had so much in- 
creased, as to require, for the payment of interest alone, an annual remit- 
tance equal to the whole export of food to all the world — producing doubt 
and general distrust — causing an extensive hoarding of money, and palsying 
the movements of commerce. As a consequence of this it is, that the coun- 
try now presents the most extraordinary spectacle in the world— that of a 
community owning one of the great sources of supply for money, in which 
the price paid for its use is generally thrice, and, in many parts of the 
country, six or eight times as great as in those countries of Europe which 
find their gold mines in their furnaces, their rolling-mills, and their cotton 
and woollen factories. 

* In the last Treasury Report (1856) the addition to the stock of the precious 
metals in the last few years is estimated at more than $100,000,000, and possibly 
even $150,000,000. Small allowance is there, however, made for a consumption in 
the arts, that must, in the last five years, have absorbed at least fifty of those mil- 
lions. None is made for the fact that $20,000,000 are always kept in the Treasury 
vaults, and, while there, are as useless as would be a similar weight of pebble- 
stones. Much advantage is claimed to have resulted from increasing the diffi- 
culty of transferring the property in money, by compelling individuals to carry 
gold in their pockets, when, if the law permitted, they would prefer to carry 
bank-notes. No allowance is made for a land system that compels millions of 
dollars in gold to be transported from one part of the country to another, at great 
cost and risk, when drafts would be used, were it not that it is the object of the 
Federal government, as far as possible, to destroy the utility of the precious 
metals, by promoting their transportation, and thus preventing their circulation. 
From the day when free trade was inaugurated as the policy of the dominant 
party of the country, there has been almost an unceasing war against credit ; 
and the result is seen in the fact that it requires $200,000,000 of gold and silver 
to carry on a smaller amount of commerce than would, under a sound system, 
be transacted by help of less than $100,000,000, and with a steadiness and regu- 
larity that now are quite unknown. 

20 



Money. 



Our policy has, with slight exceptions, looked steadily towards keeping 
down the prices of the rude products of the earth, and thus facilitating 
their export; and the precious metals always follow in their train. The 
result is seen in the general exhaustion of the soil — in the fact that agri- 
culture makes but little progress — in the diminished yield of the land, and 
in the steady decline of the price of tobacco, flour, cotton and other rude 
products of the earth. Taking the averages of the several decades since 
1810, the export prices of flour have been as follows : — 



For that ending in 1820 $10 37 

" " 1830 6 20 

« " 1840 6 78 

" " 1850 5 27 

The 3 years ending 1853 4 67 

For 1853 4 24 



— this last being probably the lowest price at which it has been sold since 
the arrival of Hendrick Hudson in your harbor. The prices above given, 
I pray you to recollect, are those furnished in the recent Treasury Reports. 
Precisely similar to this have been the facts transpiring in relation to cot- 
ton and tobacco; of the former of which, the planter was giving, in 1852, 
little short of five pounds for the same quantity of gold and silver that 
seven-and- thirty years before he obtained for one. 

The power to command the services of the precious metals grows with 
the growth of the power of association and combination. The policy of 
the Union is hostile to association, and hence it is that our products fall 
in price, while all the metals remain so dear. That is the course towards 
barbarism. You will probably be disposed to say, that prices are now very 
high, and that if such prices are to insure prosperity, it is certainly within 
our reach. Such would be the case, were it not for the causes to which 
they are due — great deficiency in the quantity produced. Twenty years 
since, we had similar prices, and for the same reason — all the energies of 
the country having then been given, as is now the case, to the creation of 
food and cotton-producing machinery, and not to the production of either 
food or cotton. Those high prices were, however, only the precursors of 
the ruinously low ones of 1841 and '42. 

The quantity of food now produced is far less, per head, than it was four 
years since ; while the average crop of cotton, for the last four years, has 
been less than that of 1851-'52. Desiring to know the cause, you need 
only to look to the facts, that the rural population of your own State is 
gradually diminishing; and that the young Ohio has now become the great 
emigrating State of the Union. The men who are now being driven from 
farms in the East, to found colonies in the West, are consumers, and not 
producers ; but the day approaches, when the effects of their labor will 
become visible in such a reduction of prices as has never before been known. 
Any one who, in 1835, had predicted the universal ruin of farms, that fol- 
lowed three years later, would have been listened to with an incredulity 
equal to that which you, probably, hear one say that the occurrences of 
1841-42 are yet to be repeated. In the last ten years, we have added 
to our numbers almost as many millions ; and yet we have scarcely more 
persons engaged in the four chief branches of manufacturing than we 

21 



Money. 



had in 1847-'48. Nearly the whole increase has been driven to the crea- 
tion of farms and plantations, that will yet overwhelm the market with 
food and cotton. The whole policy of the country is adverse to the agri- 
cultural interest, for it tends toward cheapening raw products, and thus 
promoting the exports of the precious metals. 

13. u In every kingdom into which money begins to flow in greater 
abundance than formerly, everything," says Mr. Hume, in his well-known 
Essay on Money, " takes a new face : labor and industry gain life ; the 
merchant becomes more enterprising, the manufacturer more diligent and 
skilful ; and even the farmer follows his plough with more alacrity and 
attention." 

That this is so, is well known to all. Why should it be so ? Because 
the circulation of society then increases, and all power — whether in the 
physical or social world — results from motion. When money is flowing 
in, every man is enabled to find a purchaser for his labor, and to become 
a purchaser of that of others. Therefore it is, that commerce so steadily 
increases in those countries in which the Californian and Australian pro- 
ducts now so rapidly accumulate — France, G-ermany, and Northern and 
Eastern Europe generally. When, on the contrary, money flows out, the 
circulation diminishes, and labor is everywhere wasted. That labor-power 
is capital, the result of the consumption of other capital in the form of 
food; and all the difference between an advancing and a declining state 
of society, is found in the fact, that in the one, there is a constant increase 
in the rapidity with which the demand for muscular or mental power fol- 
lows its production, while in the other, there is a daily diminution therein. 
The more instantly the demand follows the supply, the more is the force 
economized, and the larger is the power of accumulation. The longer the 
interval between production and consumption, the greater is the wuste of 
force, and the less is the power of accumulation. 

Of all the machinery in use among men, there is none that exercises 
upon their actions so great an influence as that which gathers up and 
divides and subdivides, and then gathers up again, to be on the instant 
divided and subdivided again, the minutes and quarter-hours of a commu- 
nity. It is the machinery of association, and the indispensable machinery 
of progress; and therefore it is, that we see in all new or poor communi- 
ties so constant an effort to obtain something to be used in place of it; as 
is shown in various countries in which an irredeemable paper constitutes 
the only medium of exchange. Throughout the West, a currency of some 
description is felt to be among the prime necessities of life. So well is 
this want understood, that many Eastern banks supply notes expressly for 
Western circulation, and the people there pass them from hand to hand, 
because any money is better than none, and good they cannot get, for the 
reason that metallic money always flows from the place where the charge 
for its use is high, to that at which it is low. The rate of interest in the 
West is now enormous, but every day witnesses the export of gold to the 
East, where it is somewhat less; and yet even your high interest — rang- 
ing, as it has done for years, between ten and thirty per cent, per annum 
— cannot prevent it from going to France and Germany, where it com- 
mands but five or six per cent. Money thus obeys the &ame law as water 

22 



Money. 



— seeking always the lowest level. The latter falls upon the hills, but from 
the moment of its fall it never stops until it reaches the ocean ; nor does 
the gold of California, or the silver of Mexico, stop until it reaches that 
point at which money most abounds, and at which, for that reason, the 
price paid for its use is least. 

Of all the commodities in use by man, the precious metals are those 
that render the largest amount of service in proportion to their cost — and 
those whose movements furnish the most perfect test of the soundness or 
unsoundness of its commercial system. They go from those countries 
whose people are engaged in exhausting the soil, to those in which they 
renovate and improve it. They go from those at which the price of raw 
products, and the land itself, is low — from those at which money is scarce 
and interest is high. The country that desires to attract the precious 
metals, and to lower the charge for the use of money, has, then, only to 
adopt the measures required for raising the price of land and labor. In 
all countries, the value of land grows with that development of the human 
faculties which results from diversity in ' the modes of employment, and 
from the growth of the power of combination. That power grows in 
France, and in all the countries of Northern Europe ; and for the reason, 
as has been shown, that all those countries have adopted the course of 
policy recommended by Colbert, and carried out by France. It declines 
in Great Britain, in Ireland, in Portugal, in Turkey, in the Eastern and 
Western Indies, and in all countries that follow the teachings of the Brit- 
ish school. It has grown among ourselves in every period of protection ; 
and then money has flowed in, and land and labor have risen in value. It 
has diminished in every period in which trade has obtained the mastery 
ove»* commerce. Land and labor have always declined in value as soon 
as our people had eaten, drunk, and worn foreign merchandise to the ex- 
tent of hundreds of millions of dollars, for which they had not paid ; and 
had thus destroyed their credit with other communities of the world. 

14. We are told, however, by the same writer — Mr. Hume — and in that 
he is followed by the modern economists — that the only effect of an in- 
crease of the supply of gold and silver is that of " heightening the price 
of commodities, and obliging every one to pay more of those little yellow 
or white pieces for everything he purchases." Were such really the case, 
it would be little short of a miracle that we should see money always, 
century after century, passing in the same direction — to the countries that 
are rich from those that are poor ; so poor, too, that they cannot afford to 
keep as much of it as is absolutely necessary for their own exchanges. 
The gold of Siberia leaves a land in which so little circulates that labor 
and its products are at the lowest prices, to find its way to St. Petersburg, 
where it will purchase less labor and less of either wheat or hemp than it 
would do at home j and that of Carolina and Virginia goes steadily and 
regularly, year after year, to the countries to which the people of those 
States send their cotton and their wheat, because of the higher prices at 
which they sell. The silver of Mexico, and its cochineal, travel together 
to the same market ; and the gold of Australia passes to Britain by the 
ship which carries the wool yielded by its flocks. 

Every addition to the stock of money, as we are assured by the inge- 

23 



Money. v 

nious men of modern days engaged in compiling treasury tables and 
finance reports, renders a country a good place to sell in, but a bad one 
in which to purchase. To what countries, however, is it that men have 
most resorted when they desired to purchase ? Have they not, until re- 
cently, gone, almost exclusively, to Britain ? It has been so, assuredly • 
and for the reason, that there it has been that finished commodities were 
cheaply furnished. Where have they gone to sell ? Has it not been to 
Britain ? It certainly has been so ; and for the reason, that there it was 
that gold, cotton, wheat, and all other of the rude products of the earth, 
were dear. Where do they now most tend to go when they desire to 
purchase cloths or silks ? Is it not to France and Germany ? So it cer- 
tainly is; and for the reason, that there it is that raw materials are high- 
est, and finished ones are cheapest. Gold follows in the train of raw ma- 
terials generally — these last being found, invariably, travelling to those places 
at which the rude products of the earth command the highest price, while 
cloth, iron, and manufactures of iron and other metals, may be purchased 
at the lowest ; and the greater the flow in that direction, the greater is 
the tendency to further enhancing the prices of the former, and reducing 
those of the latter. From this it would seem that increase in the supply 
and circulation of money, so far from having the effect of causing men 
to give two pieces for an article that could before have been had for one, 
has, on the contrary, that of enabling them to obtain for one piece the 
commodity that before had cost them two ; and that such is the fact, can 
readily be shown. 

It is within the knowledge of all, that manufactures have greatly fallen 
in price — the quantity of cotton cloth that can now be obtained for a sin- 
gle dollar being as great as would formerly have cost five — and that the 
reduction has taken place in the very countries into ivhich the gold of the 
world has steadily flowed, and into which it is now flowing — whence it 
would appear quite certain that finished commodities tend to fall as money 
flows in, while land and labor — the ultimate raw materials of all — tend to 
rise in price. The gold of California and Australia now goes to Germany, 
France, Belgium, and Great Britain, where money abounds and interest 
is low, because there manufactured commodities are cheap and money is 
valuable, when measured by them. It does not go to Spain, Italy, Portu- 
gal, or Turkey, because there manufactured goods are dear, and land and 
labor are cheap. It does not stop in Mississippi, Arkansas, or Texas, be- 
cause there, too, manufactures are dear, and land and labor are cheap ; 
but there it will stop at some future period, when it shall have been ascer- 
tained that the plough and the harrow should always have for their near 
neighbors the spindle and the loom. 

The higher products of a skilful agriculture — fruits, garden vegetables, 
and flowers — tend steadily to decline in price in all those countries into 
which money is flowing; and for the reason, that agricultural improve- 
ment always accompanies manufactures, and manufactures always attract 
the precious metals. Every one familiar with the operations of the West, 
knows that while corn and pork are there always cheap, cabbages, peas, 
beans, and all green crops, are invariably scarce and dear; and so continue, 
until, as around Cincinnati and Pittsburg, population and wealth have 

24 



Money. 



given a stimulus to the work of cultivation. In England, the increase of 
green crops of all kinds lias been immense, attended with the decline in 
price ; and in France, a recent writer* informs us that, notwithstanding 
the increase in the quantity of money, the price of wine is scarcely more 
than a fourth of what it was three centuries since. By another we are 
told, that " every man in France, of forty years of age, must have re- 
marked the sensible diminution of the price of garden produce, fruits of 
all kinds, flowers, etc. ; and that most of the oleaginous grains and plants 
used in manufactures have fallen in like manner; while beets, carrots, 
beans, etc., have become so common that they are now fed to animals in 
the stablest 

Food thus becomes more abundant in those countries into which gold 
is steadily flowing, and it becomes less so in those from which the gold 
flows, as is seen in Carolina, which has steadily exhausted her land — in 
Turkey — in Portugal — and in India. In all those countries, land and la- 
bor are low in price. Give them manufactures — thus enabling their peo- 
ple to combine their efforts — and they will obtain and retain gold ; and 
then they will make roads, and the supplies of food will steadily increase 
as cloth and iron become cheaper ; and land and labor will then rise in 
price. 

15. Of what use, however, it may be asked, are further supplies of gold 
and silver when a country has obtained the full allowance required for the 
most perfect circulation of its products, and of the services of the persons 
of whom the society is composed ? Is it not possible that the commodity 
may become superabundant ? It is not ; and for the reason, that the uses 
of those metals are so numerous and great. Silver is better than iron for 
a great variety of purposes. The melting-pot of the goldsmith, or the 
subjection to the hammer of the gold-beater, is the ultimate destination 
of the whole of the vast products of Siberia, California, and x\ustralia ; 
and the greater the power to use them in the arts, the more rapid must 
be the progress of civilization. That power grows with increase in the 
facility of combination, and the latter grows with the increased facility of 
obtaining this essential machinery of association. The miner of gold is 
thus always making a market for his commodity, and the more of it that 
he supplies, the greater is the tendency towards decline in the price of the 
cloth, the watches, the steam-engines, and the books that he seeks to pur- 
chase. In proof that such is the case, it is needed only that — looking 
back for half a century — we remark the vast increase in the demand for 
plate, and the growing substitution of gold for the silver that so recently 
was used. Forty years since, gold watches were the exception. Now, a 
silver watch is rarely seen. Thirty years since, a gold pencil-case was 
quite a rarity. Now, such cases are made almost by millions. A quar- 
ter of a century since, a gilt-edged book was an unusual article of luxury. 
Now, gold is required almost by tons for gilding the edges of books. So 
is it everywhere — gold and silver coming daily into use, because of the 
increased facility with which they may be obtained ; while all the com- 

* M. Moreau de .Tonnes, 
f De Fontenay, Du Revenu Foncier. 
25 



Money. 



modities required for the miner's purposes have steadily declined in price. 
That " all discord" is " harmony not understood," we are assured j and 
the more we study the laws of nature, the more conclusive become the 
proofs that such is certainly the case. 

16. The use of bank-notes tends, however, as we are assured, to pro- 
mote the expulsion of gold. Were it to do so, it would be in opposition 
to the great general law in virtue of which all commodities tend to, and 
not from, the places at which they have the highest utility. A bank is a 
machine for utilizing money, by enabling A, B, and C to obtain the use 
of it at the time when D, E, and F, its owners, do not need its services. 
The direct effect of the establishment of such institutions in the cities of 
Europe has always been to cause money to flow towards those cities ; and 
for the reason, that there its utility stood at the highest point. Even then, 
however, there were difficulties attendant upon the change of property in 
the money deposited with the bank — the owner being required to go to 
the banking-house, and write it off to other parties. To obviate this diffi- 
culty, and thus increase the utility of money, its owners were at length 
authorized to draw checks, by means of which they were enabled to trans- 
fer their property without stirring from their houses. 

The difficulty still, however, existed, that — private individuals not being 
generally known — such checks could, in general, effect but a single trans- 
fer, and thus the recipient of money found himself obliged to go through 
the operation of taking possession of that which had been transferred to 
him, after which he had, in his turn, to draw a check when he himself de- 
sired to effect another change of property. To obviate this, circulating 
notes were invented, and by their help the ownership of money is now 
transferred with such rapidity that a single hundred dollars passes from 
hand to hand fifty times a day — effecting exchanges, perhaps, to the ex- 
tent of many thousand dollars, and without the parties being at any time 
required to devote a single instant to the work of counting the coin. This 
was a great invention, and by its aid, the utility of money was so much 
increased that a single thousand pieces could be made . to do more work 
than without it could be done by hundreds of thousands. 

This, of course, as we are told, supersedes gold and silver, and causes 
them to be exported. So we are certainly assured by those economists 
who regard man as an animal that must be fed and will procreate ; and that 
can be made to work only under the pressure of a strong necessity. Were 
they, however, to look, for once, at the real Man — the being made in the 
image of his Creator, and capable of almost infinite elevation — they would 
perhaps, arrive at a conclusion widely different. The desires of that man 
are infinite, and the more they are gratified, the more rapidly do they in- 
crease in number. The miserable Hottentot dispenses with a road of any 
kind, but the enlightened and intelligent people of other countries are seen 
passing in succession from the ordinary village road to the turnpike, and 
thence to the railroad ; and the better the existing communications, the 
greater is the thirst for further improvement. The better the schools and 
houses, the greater is the desire for superior teachers and further additions 
to the comforts of the dwelling. The more perfect the circulation of 
society, the larger is the reward of labor, and the greater is the power to 

26 



Money. 



purchase gold and silver, to be used for the various purposes for which they 
are so admirably fitted, aud the greater is the tendency to have them flow 
to the places at which the circulation is established. Money promotes the 
circulation of society. The check and the bank-note stimulate that circu- 
lation — giving thereby value to labor and land ; and wherever these checks 
and notes are most in use, there should the inward current of the precious 
metals be most fully and firmly established. 

That such is the case, is proved by the facts, that, for a century past, 
the precious metals have tended most to Britain, where such notes were 
most in use. Their use increases rapidly in France, with constant increase 
in the inward flow of gold. So, too, does it in Germany, towards which 
the auriferous current now sets so steadily that notes which are the repre- 
sentatives of money are rapidly taking the place of those irredeemable pieces 
of paper by which the use of coin has so long been superseded. 

Whence flows all this gold ? From the countries in which employments 
are not diversified ; from those in which there is little power of association 
and combination ; from those in which, therefore, credit has no existence ; 
from those, finally, which do not use that machinery which so much in- 
creases the utility of the precious metals, and which we are accustomed to 
designate by the term bank note. The precious metals go from California 
— from Mexico — from Peru — from Brazil — from Turkey — and from 
Portugal — the lands in which property in money is transferred only by 
means of actual delivery of the coin itself — to those in which it is trans- 
ferred by means of a check or note. It goes from the plains of Kansas, 
where notes are not in use, to New York and New England, where they 
are — from Siberia to St. Petersburg — from the banks of African rivers to 
London and Liverpool — and from the "diggings" of Australia to the 
towns and cities of Germany, where wool is dear and cloth is cheap. 

17. All the facts exhibited throughout the world tend to prove that 
every commodity seeks that place at which it has the highest utility ; and 
all those connected with the movement of the precious metals prove that 
they constitute no exception to the rule. Bank-notes increase the utility 
of those metals, and should, therefore, attract, and not repel, them. Nev- 
ertheless, the two nations of the world which claim best to understand the 
principles of commerce, are now engaged in a crusade against those notes ; 
and in the vain hope of thereby rendering their several countries more 
attractive of the produce of the mines of Peru, and Mexico, Australia and 
California. In this case, England follows in our lead — Sir Robert Peel's 
restrictions being later in date, by several years, than the declaration of 
war against circulating notes fulminated by our government. 

It is a pure absurdity ; and its adoption here is due to the fact that our 
system of policy tends to that expulsion of the precious metals which always 
must result from the long-continued export of the raw products of the earth. 
The administration that adopted what is called free trade, was the same that 
commenced the system of compelling the community to use gold instead of 
notes ; and the result was found in the disappearance from circulation of 
coin of any description whatsoever. From that time to the present, the 
motto of the generally dominant party ,of the Union has been — u War to 
the death against bank-notes j" and, with a view to promote their expul- 

27 



Money. 



sion, laws have been passed in various States forbidding their use except 
when of too large size to enter freely into the transactions of the community. 
As must, however, inevitably be the case the tendency to the loss of the 
precious metals has always been in the direct ratio of the diminution in 
their utility thus produced. At one time only, in almost twenty years, has 
there been an excess import of those metals, and that was under the tariff 
of 1842. Then, money became abundant and cheap, because the policy 
of the country looked to the promotion of association and the extension 
of commerce. Now, it is scarce and dear, because that policy limits the 
power of association, and established the supremacy of trade. 

18. Of all the machinery in use among men, there is none whose yield 
is so great in proportion to its cost as that employed in effecting exchanges 
from hand to hand — none whose movements inward or outward are so 
strong an evidence of increase or decrease of the productive power of the 
community — none, therefore, that affords the statesman so excellent a ba- 
rometer by means of which to judge of the working of his measures. It 
is nevertheless, of all others, the one whose movements are, by economists 
generally, regarded as least worthy of consideration. By many of them 
we are even taught that the only effect of an increase in the supply of a 
commodity whose possession is so anxiously sought by all mankind, is 
that instead of having the labor of counting out one, two, or three hun- 
dred pieces, we .should be forced to count three, six, or nine hundred; and 
that, therefore, there is economy in being forced to perform the work of 
exchange with the smallest quantity of the machinery by aid of which, 
alone, it can be performed. All the teachings on this subject are in direct 
opposition to those of the common sense of mankind ; and, as is usually 
the case, that to which all men are prompted by a sense of their own in- 
terests, is far more nearly right than that which is taught by philosophers 
who look inward to their own minds for the laws which govern man and 
matter — refusing to study the movements of the people by whom they are 
surrounded. 

The uninstructed savage finds in the waterspout and the earthquake the 
most conclusive proof of the wonderful power of nature. The man of sci- 
ence finds it in the magnificent, but unseen, machinery by means of which 
the waters of the ocean are daily raised, to descend again in refreshing 
dews and summer showers. He finds it, too, in that insensible perspira- 
tion which carries off so nearly the whole amount of food absorbed by men 
and animals. Again ; he sees it in the workings of the little animals, 
invisible to the naked eye, to whom we are indebted for the creation of 
islands, elaborated out of earth that has been carried from the mountains 
to the sea, and there deposited. Studying these facts, he is led to the 
conclusion, that it is in the minute and almost insensible operation of the 
physical laws he is to find the highest proof of the power of nature, and 
the largest amount of force. So, too, is it in the social world. To the 
uninstructed savage, the ship presents most forcibly the idea of commerce. 
The mere trader finds it in the transport of cargoes of cotton, wheat, or 
lumber ; and in the making of bills of exchange for tens of thousands of 
dollars, or of pounds. The student of social science, on the contrary, 
sees it in the exercise of a power of association and combination resulting 

28 



Money. 



from development of the various human faculties, and enabling each and 
every member of society to exchange his days, hours, and minutes for 
commodities and things to whose production have been applied the days, 
hours, and minutes of the various persons with whom he is associated. 
For that commerce, pence, sixpences, and shillings are required ; and in 
them he finds willing slaves, whose operations bear to those of the ship, 
the same relation that is elsewhere borne by the little coral insect to the 
elephant. 

It is by means of combination of effort that man advances in civiliza- 
tion. Association brings into activity all the various powers, mental and 
physical, of the beings of which society is composed, and individuality 
grows with the growth of the power of combination. That power it is 
which enables the many who are poor and weak, to triumph over the few 
who are rich and strong; and therefore it is that men become more free 
with every advance in wealth and population. To enable them to asso- 
ciate, they need an instrument by help of which the process of composi- 
tion, decomposition, and recomposition of the various forces may readily 
be effected ; so that while all unite to produce the effect desired, each may 
have his share of the benefits thence resulting. That instrument was fur- 
nished in those metals which stand almost alone in the fact, that, as Mi- 
nerva sprang fully armed from the head of Jove, they, wherever found, 
come forth ready — requiring no elaboration, no alteration, to fit them for 
the great work for which they were intended, that of enabling men to 
combine their efforts for filling worthily the post at the head of creation 
for which they were designed. Of all the instruments at the command 
of man, there are none that tend in so large a degree to promote individu- 
ality on the one hand, and association on the other, as do -gold and silver 
— properly, therefore, denominated the Precious Metals. 



29 



LETTERS 

TO 

THE PRESIDENT, 

ON THE 

FOREIGN AND DOMESTIC POLICY 

OP 

THE UNION, 

AND 

ITS EFFECTS, 

AS EXHIBITED IN THE 

CONDITION OF THE PEOPLE AND THE STATE. 

BY 

H. C. CAKEY. 



PHILADELPHIA: 

M. POLOCK, No. 406 COMMERCE ST. 

LONDON: — TRUBNER & CO. 
PARIS : — GTJILLAUMIN & CO. 



CONTENTS. 

1 *• *' 



PAQB 

Letter I. — Historical sketch of the Union, from the peace of 1783, to 

the present time 3 

II. — Of banking, in the Union, for the half century which fol- 

lowed the peace of 1783 8 

III. — Of banking, in the last five-and-twenty years 13 

IV. — Phenomena offered for consideration, by the Union, at the 

present time 18 

V. — Evidences of material, moral, and political deterioration.. 24 

VI. — Phenomena of advancing and declining civilization 31 

VII. — Growing dependence of the American farmer on the dis- 
tant market — its effects 35 

VIII. — Growing dependence of the planter 40 

IX. — Decline in the power of the products of the earth, to com- * 
mand finished commodities in exchange 45 

X. — Waste of power, throughout the Union, and consequent 

exhaustion of the soil 50 

XL — Decline in the power to maintain commerce 57 

XII. — The sort of free trade that is really required 63 

XIII. — Policy of the Federal government in reference to the cur- 

rency 69 

XTV. — The precious metals the great instruments of association, 74 

XV. — Those metals go from the countries that have little com- 
merce, to those, in which employments are diversi- 
fied, and in which commerce is great 79 

( iii ) 



iv CONTENTS. 

Letter XVI. — Influence of banks, and bank notes, on the supply of 

the precious metals 87 

XVII. — How the policy of the Union affects the shipping in- 
terest 94 

XVIII. — Increasing difficulty of obtaining efficient means of 

transportation 99 

XIX. — Increasing charge for the use of money 105 

XX. — Causes of the growing difficulty of accumulation 113 

XXI. — Why it is, that protection is required ! 120 

XXII. — Of the British system, and its effects upon the planters 

and farmers of the world 126 

XXIII. — Of the policy of France, and its effects, at home and 

abroad 131 

XXIV. — Commerce grows by aid of the French system, and de- 

clines under the British one 139 

XXV. — Power to maintain commerce with foreign nations grows 

with the growth of domestic commerce 144 

XXVI. — Harmony of all real and permanent international in- 

terests 148 

XXVII. — Decline, throughout the Union, in the power to main- 
tain the local institutions 153 

XXVIII. — Declining power to contribute to the revenue of the 

State 159 

XXIX.— Conclusion 166 



LETTEKS 

TO THE 

PRESIDENT OF THE UNITED STATES. 



LETTER FIRST. 



Sir: — In common with a large portion of our fellow-citizens, 
I have looked with much anxiety for the appearance of your 
Message — hoping for some suggestions tending towards the 
relief of the community, from the accumulated evils under which it 
now so severely suffers. In this, however, I have been disappointed, 
having found therein, only the assurance, that, while the govern- 
ment "cannot fail deeply to sympathize" with the people in their 
distresses, it is wholly "without the power to extend relief" — 
the cause of difficulty being to be found in the vicious action of the 
local institutions, which are beyond the reach of any action 
of the central government. For more than forty years, as we are 
here assured, the history of the country has been one of " extra- 
vagant expansions in the business of the country, followed by 
ruinous contractions. At successive intervals," as you continue to 
say, "the best and most enterprising men have been tempted to 
their ruin by excessive bank loans of mere paper credit, exciting 
them to extravagant importations of foreign goods, wild specula- 
tions, and ruinous and demoralizing stock-gambling. When the 
crisis arrives, as arrive it must, the banks can extend no relief to 
the people. In a vain struggle to redeem their liabilities in 
specie, they are compelled to contract their loans and their issues ; 
and, at last, in the hour of distress, when their assistance is most 
needed, they and their debtors together sink into insolvency." 

For all these difficulties, we are, as you have here informed 
your constituents, indebted to the excess of power in the States. 
" The framers of the Constitution," in your opinion, having given 

(3) 



4 



LETTERS TO THE 

8 



" to Congress the power 1 to coin money and to regulate the value 
thereof,' and prohibited the States from coining money, emitting 
bills of credit, or making anything but gold and silver coin a 
tender in payment of debts, supposed they had protected the 
people against the evils of an excessive and irredeemable paper 
currency. They are not," in your opinion, to be held "responsible 
for the existing anomaly, that a government endowed with the 
sovereign attribute of coining money and regulating the value 
thereof, should have no power to prevent others from driving this 
coin out of the country, and filling up the channels of circulation 
with paper which does not represent gold and silver." 

The Constitution having, in this respect, as you suppose, proved 
a total failure, the remedy is, as you seem to think, to be found 
in increasing the power of the Federal government, at the expense 
of those of the States. Admitting the facts to be precisely as you 
appear to think them, you are certainly right, and the sooner we 
make the change, the better will it be, not only for ourselves, 
but for the world at large — so frequently disturbed by re- 
vulsions consequent, as it would seem, upon the existence of our 
Federal system. Before, however, deciding, that the fault does 
really lie with the States — and, still more, before deciding to 
make a change in that direction, it would, as it seems to me, be 
well, calmly to review the past — giving the facts in the precise 
order of their occurrence, and thus enabling our fellow-citizens to 
determine for themselves, whether the difficulties you have so well 
described, have had their origin in the excess of central, or of 
local, action. Such an examination might prove, that the cause 
of those revulsions lay with the central government ; and, if so, 
then, any motion in the direction you have indicated, would but 
augment the evils under which we suffer. Firmly believing that 
such would be its result, I am induced to address to you this 
letter — doing so, in the full confidence, that you would much 
rejoice in having it demonstrated, that, the cause of error not 
being found in the local action, we might safely permit the 
Constitution to remain untouched — leaving the local authorities 
to continue in the exercise of all the powers not expressly parted 
with, when the sovereign States united in the formation of our 
present Union. — It being the tendency of power to steal from the 
hands of the many to those of the few, "liberty," as has so well 
been said by one of your illustrious predecessors, " can be main- 
tained, only at the price of eternal vigilance and if, by reason 
of failure in its exercise, we should, under your guidance, make 
any step in a direction adverse to freedom, it would to you, I am 
well assured, be cause of great and permanent regret. Without 
apology, therefore, it is, that I ask your attention to the following 
brief summary of our history, in the past half century. 

From 1807 to 1815, we were, in a great degree, driven from 
the ocean, and forced to look homeward for our commerce — 



\ 



PRESIDENT OF THE UNITED STATES. 



5 



non-intercourse laws having followed closely on the heels of an 
embargo, and that, in its turn, having been succeeded by a war 
with England. Manufactures had, of course, grown rapidly — 
making a market at home for all the products of the earth, 
and enabling the consumers and the producers to take their places 
by each other's side. As a consequence of this it was, that after the 
close of the war, there existed, throughout the country, a degree 
of prosperity such as had never before been known. Farmers 
and planters were rich, for the prices they obtained wei*e great. 
Mechanics were prosperous — their services being everywhere in 
demand. The revenue was large, for the people could afford to 
pay for the products of foreign lands. The government was 
strong, for it was rapidly diminishing the public debt. 

Less than two years later, however, the whole was changed — 
the duties on imports having then been much reduced, and ad 
valorem duties, to a considerable extent, substituted for those 
which had been specific. The consequences of this speedily exhi- 
bited themselves, in the extensive closing of manufacturing esta- 
blishments — in the creation and failure of numerous banks — in 
the decline in price, of all the products of the farm and the planta- 
tion, and the ruin of farmers and planters — in the diminished 
demand for labor — in the growth of pauperism — in the export 
of specie — and in a growing public debt. Free trade had found 
the country, in 1816, in a state of high prosperity, but it left it 
almost ruined. 

With the year 1824, there came a partial change, followed, in 
1828, by a more extensive one — the central government then 
changing its policy from a free trade to a protective one. Here, 
again, the effects were speedily seen, in the revival of manufac- 
tures — in the demand for the products of the earth — in the 
import of specie — in an increase of the public revenue, so great 
as to require the emancipation of tea, coffee, and other com- 
modities, from all contribution to the public revenue — in the final 
extinction of the public debt — in a general prosperity, public and 
private — and in a feeling, throughout the community, of strength 
and power, far exceeding even that which followed the return of 
peace, in 1815. That prosperity, however, was a quiet and 
tranquil one — there having been but little speculation, and, 
therefore, little tendency towards the creation of unnecessary 
banks. The few that had been created, had found their places in 
the Eastern States. The total number iu 1830, was but 321, 
against 307 that had existed ten years previously ; and the increase 
: n the amount of capital, was but $3,000,000 — the $107,000,000 
of 1820, being represented in 1830, by $110,000,000. 

Again, however, in 1834, the system of the central government 
was changed — provision having been made in 1833 for the gradual 
passage from a protective to a merely revenue tariff, the last stage 
of which was to be reached in 1842. Numerous banks were now 



6 



LETTERS TO THE 



again created ; enormous foreign debts were incurred ; and the 
result was seen, in the insolvency of the banks — the ruin of the 
merchants — the prostration of the farmers and planters — the 
drain of specie — the repudiation of States — and the bankruptcy 
of the treasury — the government itself being reduced to the use 
of inconvertible paper money, as the only means by which the 
machine of state could be kept in motion. 

Once again, in 1842, the system of the central government was 
changed — a highly protective tariff having been substituted for 
the revenue one of 1841-2. Few, if any, banks were now created ; 
foreign debts were now paid off ; banks now resumed payment ; 
merchants became, once again, prosperous ; specie flowed in ; States 
became again able to collect their taxes, and thereby redeem them- 
selves from the disgrace of repudiation ; and the revenue increased 
rapidly, while the peaceful policy of the country greatly facilitated 
reduction in the sums demanded from the treasury. Peaceful and 
quiet prosperity was the characteristic of this period — there 
having been no speculative movement whatsoever, and, therefore, 
no inducement for any extension of the number of institutions em- 
ployed in money operations. At no period in the history of any 
country, had there existed so high a degree of confidence in the 
future, as was found here existing, in the year which preceded the 
enactment of the revenue act of August, 1846. 

By that act, the system of the central government was once 
more changed — protection having been abandoned, and the tariff 
having been adjusted with reference to revenue alone. It has 
now been in existence eleven years — years characterized by art 
amount of instability and uncertainty in all commercial affairs, 
almost equal to that which existed in the period which embraced 
the embargo and non-intercourse acts, and the war which fol- 
lowed. Banks innumerable have been created. Prices have 
risen and fallen repeatedly — the changes having been great, 
almost beyond all previous precedent. Flour and cotton have, 
at times, been lower in price than ;1 had ever before been known ; 
while, at others, they have exhibited a tendency towards rising to 
the point at which they had stood at the passage of the free trade 
act of 1816. The result is seen in the fact, that the manufacturers 
and the merchants are ruined — that the number of persons unem- 
ployed is great, beyond all former precedent — that the prices of 
all our staples are falling with great rapidity — that our ships are v 
unemployed — that our banks have again been driven to suspen- 
sion — that the revenue has failed — and that, notwithstanding the 
receipt of hundreds of millions of Californian gold, the government 
is reduced again to the necessity of using an inconvertible paper 
money, as the only means of keeping itself afloat. 

In a state of barbarism, theories abound, and they do so, because, 
in default of knowledge, almost every occurrence is regarded as 
accidental, or is attributed to the direct interposition of some 



PRESIDENT OF THE UNITED STATES. 



7 



imaginary being*, good or evil, as the chance may be. With time, 
however — ■ the regular succession of cause and effect coming 
to be understood — men, by degrees, arrive at the knowledge 
of the existence of laws, by which the movements o£ both men 
and matter are governed. What, then, is the laiv, that may be 
deduced from the above brief history ? In reply, it may be said, 
that in every case in which the central government has moved in 
one direction, few banks have been created — speculation has 
been trivial — specie has flowed in — the credit of the banks has 
been maintained — manufacturers, merchants, farmers, and planters, 
have been prosperous — States have paid their interest — the 
revenue has been abundant, and the public debt has been dimin- 
ished — leaving, to the succeeding policy, a people in a state of 
high prosperity — a community growing in power, and in the 
respect with which they have been regarded — and a government 
becoming, from day to day, more independent in its action. 

On the other hand, we see that in every case in which it has 
moved in an opposite direction, the reverse effects have been pro- 
duced — many banks having been created — speculation having 
been carried to the pitch, almost, of frenzy — specie having flowed 
out — the monetary institutions of the country having been, on 
both the last occasions, driven to suspension — manufacturers and 
merchants, farmers and planters, having been ruined — stay-laws 
having been enacted — States having repudiated their debts — 
revenue having declined until it has almost ceased, and the 
public debt having increased — leaving to the succeeding policy, a 
people in a state of ruin, a community declining in power and in 
the respect of the world, and a treasury almost bankrupt. 

Such being the facts presented for consideration, on a survey 
of the policy of the country, for the long period of fifty years, the 
law to be deduced therefrom, would seem to b'e as follows : 
Under the system which looks to bringing together the producer 
and the consumer, the community increases in strength, wealth, 
znd power ; whereas, under that, which looks to separating the 
consumer and producer, and is known as "free trade," it 
declines in all — becoming daily poorer, weaker, and more 
dependent. 

That being the law, it would seem to follow that the cause of 
ruin is to be found in the central government ; and that it is to a 
modification of its action, and not to that of the local govern- 
ments, we should look for remedies for existing evils. That such 
is certainly the case, I propose to offer further evidence in another 
?tter — remaining meanwhile, with great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, December 21st, 1857. 



8 



LETTERS TO THE 



LETTER SECOND. 

To insure to the people a sound circulation, appears to you, 
Mr. President, to be "one of the highest and most responsible duties 
of government" — the one, too, requiring "the utmost possible 
wisdom and skill," so to adapt it to "the wants of internal trade 
and foreign exchanges," as to prevent fluctuations in the value 
of property, such as the American historian is so frequently called 
upon to record. "Unfortunately," however, in your estimation, 
" under the construction of the Federal Constitution, which has 
now prevailed too long to be changed, this important and deli- 
cate duty has been dissevered from the coining power, and virtually 
transferred to more than fourteen hundred State banks, acting 
independently of each other, and regulating their paper issues 
almost exclusively by a regard to the present interest of their 
stockholders." 

Such being the unhappy results of our Federal system, the 
central government cannot, as you say, "do much to provide 
against a recurrence of existing evils." Utterly powerless itself 
for good, while surrounded by local governments all-powerful for 
evil, all that it can do, is, to "rely upon the patriotism and wis- 
dom of the States for the prevention and redress of the evil. If 
they," as you continue, "will afford us a real specie basis for our 
paper circulation by increasing the denomination of bank notes, 
first to twenty, and afterward to fifty dollars ; if they will require 
that the banks shall, at all times, keep on hand at least one dollar 
in gold and silver for every three dollars of their circulation and 
deposits ; and if they will provide by a self-executing enactment, 
which nothing can arrest, that the moment they suspend they 
shall go into liquidation, I believe that such provisions, with a 
weekly publication by each bank of a statement of its condition, 
would go far to secure us against future suspensions of specie 
payments." 

That efforts will be made to do these things is highly probable, 
but to what purpose ? None, whatsoever ! The records of our 
State legislatures, for the last twenty years, present to view a host 
of laws, having for their object the production of a state of things 
such as you here desire ; and yet, on the first occasion, they are 
set aside, and as unhesitatingly, by the same legislative bodies, 
as has been the famous provision in the Charter Act of the Bank of 
England. Why is this ? — Because the regulation of the currency, 
on this side of the Atlantic, has been in the hands of men, as 
little capable of executing that " highest and most responsible of 
the duties of government," as Messrs. Overton and Peel are proved 
to have been on the other. The provision of the English law being — 



PRESIDENT OF THE UNITED STATES. 



9 



like those in our own charters — based upon a fallacy, has now been 
twice suspended ; and suspended it must again be, whenever the 
time shall arrive, that its services will again be needed. So is it, 
and so must it continue to be, with all similar provisions in the 
charters of this country — as long as the action of the central 
government shall continue to be hostile to the establishment of a 
perfect currency ; for there, and not with the local institutions, 
lies the difficulty, as you may rest assured. 

Let it be supposed, however, that the States continue to pursue 
their own course — doing, in the future, precisely as they have done 
in the past — creating banks ad libitum, and not providing, 
effectively, for carrying out the plan that is here suggested. That 
they will not so provide, seems very evident. More than twenty 
years since, one of your predecessors denounced banks and bank 
notes, in terms as strong as those now used by you ; and since that 
time, their denunciation has constituted an essential portion of the 
creed of the great democratic party — that party of which you, 
sir, are the representative ; but, with no other effect, as yet, than 
that of more than quadrupling the number of banking institutions 
— the 328 banks of 1830 being now represented by more than 
1400. — This being progress backward, with what reason can we 
look for such a change in the modes of thought, as would produce 
a movement in the direction you desire ? As I think, with 
none. — If then, the facts be as you hold them to be — if the 
difficulty does really rest with the local governments — and if our 
only chance of remedy is to be sought in State discretion — then 
are we truly helpless ; and then is our Federal system a total 
failure. — Fortunately, such is not the case. Fortunately, the 
difficulty does not lie with the States, as you, I am sure, will 
gladly be convinced, after reading the brief sketch of our banking 
history, that will now be made. 

American banking had its origin in New England — the good 
sense of its people having early taught them the advantages that 
must result, from having places at which those who had money to 
lend, could readily meet those who desired to borrow — both par- 
ties being thus relieved of all necessity for the employment of 
middlemen, in the arrangement of their exchanges. From the close 
of the war, in 1T83, to 1811, the average number of banks in 
existence, throughout the New England States, was 16 ; while 
the number of failures in all that period — embracing, as it did, 
the years in which, under French decrees, and British Orders in 
Council, the seas were swept of American ships — was only four. 

Taking now a longer period, the half century from 1785 to 
1835 — embracing not alone the times of piracy on the ocean, above 
referred to — of embargoes and non-intercourse laws — but, also, 
those of the war of 1812 — of the disturbed period that followed 
close upon the peace — and of the celebrated crisis of 1825 — we 
find the number of banking institutions to have averaged no less 



10 



LETTERS TO THE 



than sixty ; while the total number of failures, in the whole half 
century, was only twenty, or two in every five years, of a period 
of greater commercial disturbance than had ever before been 
known. Of these failures, five took place in Massachusetts; but 
by these the public suffered little, if any, loss. One paid all its 
debts. A second, it is believed, did the same. Of the third, the 
bills outstanding, at the date of its stoppage, were but $27,000. 
The remaining two certainly paid every outstanding claim, except 
$19,878 ; and it is not now certain, that even that small sum was 
not subsequently paid. Admitting, however, that it remained 
unpaid, the total loss to the people of Massachusetts, in a period 
of fifty years, from dealing with banks, was less than $1000 per an- 
num, and not more than one dollar in every million, — or the 
ten-thousandth part of one per cent. — of the transactions whose 
performance had been facilitated by the existence of such institu- 
tions, and by the substitution of bank notes for a metallic cur- 
rency. — Small, even, as is that proportion, it might, as I think, 
be much reduced — it being based upon the idea, that the opera- 
tions facilitated were but forty times the amount of the capital ; 
whereas, it might be almost safe to place them at four hundred 
times that amount — in which case, the proportion of loss sus- 
tained, would be only the hundred-thousandth part of one per cent. 

I pray you now, Mr. President, to reflect upon the quantity of 
service rendered by banks, in collecting, guarding, and transfer- 
ring property — all of this work being done, without charge of any 
kind ; and to determine for yourself if, in any other case, so large 
an amount of service is rendered at so small a cost. The broker 
charges an eighth, or a quarter per cent., when he arranges a 
transfer of stocks. The wholesale dealer charges 2J, or 5 per 
cent. The retailer takes 10, 15, or 20 per cent. ; but the bank 
performs an amount of service — whose sum is equal to the total 
amount of the exchanges of society, in which money is used — 
charging nothing whatsoever. Sometimes, a banking institution, 
badly managed, falls into difficulty. So, however, is it with 
brokers and commission merchants. In the case of these latter, 
however, the loss is generally almost total ; whereas, in that of 
the banks, the loss falls almost exclusively upon those who had 
done the work — the stockholders. 

Seeing the facts to be as I state, I would ask you, Mr. Presi- 
dent, to say, if you had been a resident of Massachusetts — and 
what is said of that State is almost equally true of all New Eng- 
land, iu the period above referred to — would you have been 
pleased, whenever you had a large amount of money to receive, 
to find yourself compelled to carry your silver on your back, or in 
a wheelbarrow ; or to pay a commission to have it converted into 
gold, in order that you might be enabled to transfer it from place 
to place ; and to do all this, too, because it had been determined 
that it was the duty of "the government" to furnish a currency — 



PRESIDENT OF THE UNITED STATES. 



11 



tfiat that duty required great " wisdom and skill" — by the appli- 
cation of which, it had arrived at the conclusion, that shopping 
with bags full of dollars was far more convenient and agreeable 
than the performance of the same operation, with the aid of 
pocket-books filled with pieces of paper, by means of which this 
property in money could be transferred without the necessity for 
hauling the silver, or the gold ? That you would have preferred 
the notes, I feel assured. 

In New York, the banks, in the thirty years prior to 1837, had 
averaged 26 in number ; and the total number of failures had 
been 16; or about one-half of one per cent., per annum. The 
losses, however, fell so almost exclusively upon the stockholders, 
that if we here estimate the risk of loss to the community, by 
reason of dealing with banks, or of using bank notes, at a single 
dollar in a million, it is much beyond the truth. 

In Pennsylvania, the average number of banks in existence, in 
the same period, had been 29, and the total number of failures 
had been 19 — nearly all of them, in the calamitous period that 
followed the adoption, by the central government, of the free 
trade policy of 1816-18. Being an agricultural state, Pennsyl- 
vania suffered heavily from the great depression in the prices of 
all her products, when she lost the domestic market that had been 
supplied by mines and furnaces at home, and factories and fur- 
naces in other States. From 1820 to 1837, there were but three 
failures, all of them trivial in amount. In that period, ail the 
loss to the people of the State, from trading with banks, or 
from the use of bank notes, was not even a single dollar in a 
million — that having been all the price they had paid, for the 
vast amount of services performed by their banking institutions. 

Passing thence south and west, we find, at every stage, a 
diminishing density of population, attended with increase of risk. 
South of Pennsylvania and of the Ohio river, there were, in the 
period ending in 1836, no less than 84 failures, while, west of 
that State, the number was 27. Nearly the whole of them had 
resulted, as had those of Pennsylvania herself, from the premature 
attempt to establish shops for the purchase and sale of mouey, in 
regious where all desired to buy, and none had that commodity 
to sell. The consequences were such as might well have been 
anticipated. After fruitless attempts to establish themselves in 
business, they stopped payment — doing thus, as would be done 
by an individual who had engaged in a pursuit for which the 
community was not prepared. 

North and east of the Ohio river, the total number of failures, 
from the first institution of a bank, to the year 1836, was precisely 
65; or, less than one-half of the failures of private bankers, 
in England, in the years 1821-26 — a period in which there was 
no extraordinary occurrence — ho change from war to peace, or 



12 



LETTERS TO THE 



from peace to war — to produce a feeling of insecurity, or to b* 
the cause of loss. 

Including all the States, north, south, east and west, the num- 
ber of failures, from the date of the first bank, had been, in 1836, 
less by one-fourth than those of England, in the three years, 
1814-16 ; and the amount of loss sustained by the American 
public in a century, had not, as I believe, been one-twentieth 
as great, as that of the people of England, in three short 
years. 

Since 1836, there has been a change, the causes of which will 
be shown in another letter. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, December 23d, 1857. 



PRESIDENT OF THE UNITED STATES. 



13 



LETTER THIRD. 

Having small respect for authority, General Jackson attached 
little value to the labors of Hamilton and Madison, commentators 
on the Constitution ; or to those of Jay, Ellsworth, and Marshall 
— the men, Mr. President, to whom we owe those early decisions, 
which laid the foundation of our constitutional law — decisions 
fully acquiesced in, by all the distinguished men who had pre- 
ceded him in the Presidential chair, from Washington to the 
younger Adams. Preferring his own construction of that instru- 
ment, he was little more than seated in the high position to which 
he had been called, than he commenced suggesting doubts, as to the 
power of the government to delegate to individuals, the power to 
exercise, throughout the Union, the banking privilege. In his 
view, a State bank, based upon the public revenues, and managed 
of course, by officers of the general government, would have been 
greatly to be preferred. 

Centralization being now the order of the day, and Congress 
failing to obey his orders, we find him next, on his own motion, 
withdrawing the public moneys from where they had been placed 
by Congress — and, at his sovereign will and pleasure, dividing 
them among the local institutions Next, he is found, urging the 
States to the creation of local banks, to replace the great institu- 
tion with which he was now at war. That done, we see him 
next, declaring war against all banks and notes — the whole 
power of the central authorities being now exerted, for the coer- 
cion of the States into the prohibition of bills of the smaller 
denominations. Gold being now regarded as the one thing need- 
ful, it was, as we were told, to be made to "run up the Missis- 
sippi and, that it might do so, the standard was changed — the ex- 
changeable value of gold, as compared with silver, having been raised 
to 16 to 1. Following on this, we have an order to the receivers 
of the revenue, to accept of nothing but the precious metals — 
notes of all denominations being thus discredited, that the people 
might be induced to make a run upon the banks. Now, for the 
first time in the history of the world, do we find a regularly organ- 
ized government engaged in a war to the knife against credit, in 
all its forms ; and now, for the first time in a period of peace, 
were the banks of the Union compelled to close their doors, 
against those who desired payment of their notes. Next, we 
find the Treasury demanding additional powers, and gently inti- 
mating that by aid of the public revenues, the domestic exchanges 
might be much facilitated. On one side, the Postmaster-General 
desires that his agents may be employed in the transmission of 
private funds; while, on another, the attention of Congress is spe- 



14 



LETTERS TO THE 



dally invited to the advantage that would result from the insti- 
tution of a government office, charged with the issue of paper 
money — thereby superseding the local institutions altogether. 
The war thus commenced, has since been followed up — the use 
of circulating paper having been repudiated by the government — 
vaults having been constructed, in which to store the public trea- 
sures — and the standing topic of denunciation, at conventions of 
towns and cities, counties and States, and of the Union itself, 
having been banks and paper money. The result is seen, in the 
fact, that gold has ceased to circulate, and that the treasury is 
driven to the use of inconvertible notes. 

Such is the history of banking in the United States, since the 
peace of 1T83 — a period of seventy-five years, during the first 
fifty of which, the power reserved by the States had been respected 
— and that, too, most scrupulously — by Washington, Adams, Jef- 
ferson, Madison, Monroe, and the younger Adams ; whereas, 
since that time, there has been an unceasing effort to weaken the 
States, while strengthening the central power. How far the one, 
or the other, of the systems thus described, has tended to increase 
the security of persons and of property, by giving to the people 
that which you, Mr. President, so much desire, "a sound circu- 
lating medium," the amount of which "has been adapted with 
the utmost wisdom and skill " to the needs of commerce — thereby 
insuring that "the market value of every man's property" shall 
not, by reason of its fluctuation, "be increased or diminished" — 
and thus preventing " the incalculable evil" that might otherwise 
be produced — is shown in the following brief resume of the above 
short history. 

For nearly half a century — during which, banks, and their circu- 
lation, had been left, in accordance with the Constitution, under 
the control of the local legislatures, their number was so pru- 
dently increased, that, at its close, it was only 328. In half that 
time, during which the central government has undertaken to su- 
persede the State authorities, it has grown to more than 1400. 

For half a century, during which the State authorities remained 
undisturbed, neither the people nor the government ever failed, 
in time of peace, to be supplied with coin for circulation. In 
half that time, under the direction of the central government, both 
government and people have twice been driven to the use of an 
irredeemable paper circulation. 

For half a century, the State authorities so managed the bank- 
ing system, that no general suspension ever occurred, except 
when — at the instance of the general government, and after 
having largely aided that government, in the then existing war 
against Great Britain — they stopped in the autumn of 1814, and 
remained suspended, until the return of peace enabled them once 
again to resume their operations. In half that time, since the 
central government has assumed to supersede the local ones, 



PRESIDENT OF THE UNITED STATES. 



15 



there have been two suspensions that have been general ; and a 
third, in which were embraced, all the States that had followed 
the lead of the central power, in prohibiting the nse of the smallei 
notes — the only States that did not then suspend, having been 
those which had persisted in the determination to regulate their 
currency for themselves. Once again, the suspension has ceased 
to be general ; and I would now, Mr. President, ask your particular 
attention to the fact, that all the States, with, I believe, but one 
exception, that use small notes, have now resumed, while all of 
those, ivith one exception, that have prohibited the smaller notes, 
remain suspended. 

Such, Mr. President, are the facts, and being such, they fur- 
nish, as I think, a reply that is most conclusive to the argument 
you have just presented, in favor of an extension of the central 
power. All of them having passed before your own eyes, all of 
them have been known to you, but, by reason of the unceasing 
demands upon your time, in the various honorable offices you have 
been called to fill, many of them had, doubtless, escaped your 
recollection. Had it been otherwise, you certainly would have 
hesitated, before recommending any enlargement of a central 
power, whose injurious influences had been so fully demonstrated. 

While recognizing the authority of the States, as being beyond 
the reach of any direct assault, you suggest a mode, by means of 
which, power may now be centralized in the hands of Federal 
agents ; and yet, the mere fact of the necessity for resorting to 
means so indirect, would seem to me to furnish proof conclusive 
of your error. It is within the power of Congress to establish 
''uniform laws on the subject of bankruptcies throughout the 
United States;" but, it being not within it to enact any law, 
that shall not be of general application to all the people of the 
Union, the enactment of such an one as that you now suggest, 
would certainly seem to be a direct violation of the Constitution. 
How far it is within the power of Congress, to pass a law that 
shall embrace both individuals and corporations, it is not for me 
to say ; but, certain it is, that eminent jurists have held, and do 
still hold, that the States did not, when accepting the Constitu- 
tion, grant to Congress any control, whatsoever, over corporations 
holding their existence under the local laws. That, however, 
Mr. President, will be a question of small importance, if I shall 
have succeeded in satisfying you, that all the monetary diffi- 
culties we have experienced, and which you so well describe, have 
had their origin in the attempt to withdraw from the States, the 
power reserved to them by the Constitution — in an excess of cen- 
tralization, and not in any excess of localization. 

We are told, however, that the quantity of gold now in the 
country, amounts to no less than $260,000,000 ; and are, there- 
fore, urged to force it into use. It may be so, that there is that 



16 



LETTERS TO THE 



quantity ; but, if so, where is it ? A year since, the banks had 
$50,000,000 ; and they have no more now. A year since, the 
sub-treasuries held $20,000,000; now, they have $6,000,000. 
Adding together these two sums, we have $56,000,000 — leaving 
$204,000,000 yet to be accounted for. Where may they be found ? 
In use among the people they certainly are not, for the largest 
calculation of gold and silver in use, cannot exceed one dollar 
per head — giving $30,000,000 as the quantity usefully employed, 
and leaving $114,000,000 yet to be discovered. Where must 
they be sought ? If anywhere, they are hoarded. Why are they 
hoarded ? Because the government sets the example of hoard- 
ing the precious metals, and thus teaches the people what it is, 
that they themselves should do. Because, for twenty years past, 
the government, and its friends, have denounced banks as being 
insecure, and bank notes as being worthless rags. Because, in 
opposition to the practice of all really enlightened governments, 
our own has been, for the last five and twenty years, engaged in 
an almost unceasing war upon private credit. For these reasons 
it is, that the precious metals are now so extensively hoarded, and 
while so hoarded, as useful as an equal weight of pebble-stones 
would be. 

How can all this gold be brought into active circulation ? An 
answer to this question, Mr. President, may be found in one of 
those delightful fables, that you, in early life, must have often 
read. The wind and the sun differed, one day, as to which could 
most readily compel a traveller to lay aside his cloak. The wind 
commenced blowing with all his might ; but the harder he blew, 
the tighter the cloak was held. The sun next tried his hand — 
darting his warmest beams upon the traveller's head. Forthwith 
the hold upon the cloak was loosened, and before the lapse of 
many moments, it was thrown aside. Here, Mr. President, is a 
great lesson, by the study of which the government might largely 
profit. For more than twenty years, your predecessors have been 
endeavoring to force the people to the use of gold — seeking to 
accomplish that object, by means of the annihilation of the credit 
of banks and individuals ; but the effect, as yet, has been only 
that of driving it out of circulation,, and into private hoards, the 
amount of which is, probably, immensely great. Having played 
the part of the wind, and failed, let it now, Mr. President, under- 
take that of the sun — seeking to increase the confidence of the 
people in one another; and the effect will speedily be seen, in the 
re-appearance of the gold that is now so useless. Let this be 
done — let the treasury smile upon the people, instead of frowning 
upon them — let it make common cause with the producing classes, 
and not with the merely consuming ones — let it cease to make 
war upon the powers of the States — and you will have, in your 
next message, the gratification of offering to your fellow-citizens 
a picture directly the reverse of that which you have now presented. 



PRESIDENT OF THE UNITED STATES. 



17 



Our system finds its base in local, and not in central, action. 
The tendency of almost all the acts of the Federal government, 
for the last five and twenty years, having been towards the aug- 
mentation of the central power at the expense of that which is 
local, the injurious effects become more visible, from day to day — 
human progress, in whatsoever direction, being always one of con- 
stant acceleration. That such is the case, is clearly shown in the 
recommendations of the document now before me — leading, as 
they inevitably must, to the entire suppression of the power of 
the States, in reference to that which you, yourself, regard as one 
of the most important of governmental duties. A closer exami- 
nation, and more careful study of the facts here given, would, as 
I think, have satisfied you, that it is to the centralizing tendencies 
of recent years, we owe the extraordinary demoralization to which 
your attention will next be called, by 

Yours, with great respect, 

Henry C. Carey. 

Philadelphia , December* 25th, 1857. 



2 



18 



LETTERS TO THE 



LETTER FOURTH. 

Steadiness and regularity, Mr. President, are the character- 
istics of advancing civilization. Instability and irregularity, 
those of advancing barbarism. The first are found, as you have 
seen, and in a degree that is quite remarkable, in the half century 
during which the local authorities controlled our banking opera- 
tions — there having been, as has been shown, no instance of 
general suspension, in that long period, except in 1814, and then, 
at the instance of the central government ; whereas, in the five 
and twenty years, in which the local authorities have been, to 
so great an extent, superseded, the suspensions have been three 
in number. Need we wonder, then, that "a state of crisis 
may now," in the opinion of foreign journalists, be regarded 
as "the normal condition of the great republic of the West?" 
Assuredly not ! It is the natural result of a centralizing policy, 
that at one time, urges upon the people the creation of banks, and 
at another, denounces such institutions as wholly unworthy of 
credit — of a policy that, at one moment, squanders the public 
property with a view to the extension of railroads, and at 
another, urges the passage of a special bankrupt law, with a view 
to secure to the central government, the exclusive control of both 
banks and roads. 

Instability tends to increase the wealth of the few who are rich 
— while impoverishing the many who look to the sale of labor 
for the means of obtaining food for their wives, their children, 
and themselves. It impoverishes the active and useful members 
of society ; but it enables the idle and the useless to accumu- 
late fortunes, at the expense of those who make roads, build mills, 
and open mines, and thus increase the productive powers of labor- 
ing men. Instability has been, since the central government 
undertook the regulation of the currency, the essential character- 
istic of our policy, and hence it is : 

That, notwithstanding grants of land by millions, and tens of 
millions, of acres, for the construction of railroads, and notwith- 
standing an unceasing effort to promote the carrying interest, at 
the expense of the producing one — railroads and canals, that 
have cost $1,000,000,000, have fallen to less than $400,000,000, 
and their proprietors are ruined. 

That, the factories of the country, too, are in a state of ruin. 
For years, they have struggled against the tide, but now, the 
tide has overwhelmed them — reducing to a state of poverty, 
thousands of the men to whose unceasing efforts, we have owed 
the introduction and perfection of the most useful manufactures. 
Hundreds of millions have been expended upon the creation of 



PRESIDENT OF THE UNITED STATES. 



19 



magnificent works, whose value might now be counted by little 
more than tens of millions. 

That, the machine shops, too, are closed — machines not being 
required, when mills have ceased to work. 

That, the mechanic is now, everywhere, turned adrift, to seek 
in scratching the soil, the means of support that his trade will not 
afford him — he, and his country, thus losing the use of the 
capital, of knowledge, he had obtained by means of a long 
apprenticeship. 

That his daughters, too, are deprived of work, and not unfre- 
quently, forced to make their election between starvation on the 
one hand, and prostitution on the other. 

That, mines are closed, and miners are driven to seek employ- 
ment as common laborers — leaving their wives and children to 
suffer for want of food. 

That, hundreds of little capitalists, who had invested their all 
in the creation of machinery, for facilitating increase in the supply 
of fuel, are now in a state of ruin — the sheriff selling out theii 
little properties, which are being purchased by the men who are 
already rich. 

That, furnaces capable of yielding hundreds of thousands of 
tons of iron, are closed, and their proprietors ruined. 

That, mines of ore, -endless in quantity, and capable of supply- 
ing lead, iron, and copper, to the world, — mines, too, that havo 
required vast amounts of capital for their development — are idle, 
while the men by whom they had been developed, are reduced to 
poverty. 

That, rolling mills, capable of supplying half the iron required 
for the Union, are closed — to the utter ruin of those who own them. 

That, ships, wholly unemployed, are rapidly accumulating in 
our ports, while the ships themselves as rapidly decline in value. 

That, while the commerce of the world tends, everywhere, to 
seek tiie aid of steam, and while steamers are fast superseding 
sailing ships, the people of the Union find themselves obliged to 
depend, almost exclusively, upon the ships of other nations ; and 
are likely, before the close of your administration, Mr. President, 
to find themselves without a single ocean steamer, engaged in any 
trade, in which foreign competition is not, by law, prohibited. 

That, the trade with California, upon which we have hereto- 
fore relied for supplies of gold, has so far passed away, as to 
require from us little more than supplies of butter, shoes, boots, 
and agricultural machines — that being all the commerce now 
resulting, from an expenditure of labor and capital that, had they 
been applied at home, would have yielded at least a thousand mil- 
lions a year. 

That railroads and ships, mills and factories, mines and fur- 
naces, are, thus, involved in one common ruin — the depreciation 
in the value of all this property, being, at the smallest calculation, 
$1,000,000,000. 



20 



LETTERS TO THE 



That, the trading interest — so long the almost exclusive object 
of governmental favor — participates in the general ruin. 

That, the owners of houses are unable to collect their rents ; 
and that, their property declines in value, while the taxes are 
increased. 

That the farmer finds his consumers declining in number, while 
his competitors are as rapidly increasing — the system of the 
country tending, as it long has tended, towards forcing into the 
work of cultivation all who thus far have found, or should have 
found, employment in mills, machine shops, mines, and furnaces ; 
and that, he has now before him, should Providence favor him 
with liberal crops, the prospect of seeing flour at a lower price 
than has ever yet been known. 

That' the planter has before him a reduction in the home de- 
mand for his commodity, to the extent of 250,000 bales; that, 
almost simultaneously with this decreased demand, his crop is 
likely to be four times as much increased : and that, therefore, 
should he be favored in the seasons, he, too, is likely to see his 
staple reduced to a price lower than he has ever seen.* 

Taking the probable reduction in the value of land, and 
in that of slaves, at only $1,000,000,000, and adding it to that 
in railroads, mills, mines, and furnaces, we obtain the sum of 
$2,000,000,000. Adding now, thereto, the reduction in the 
value of real estate, other than farming and planting land, we 
shall obtain a sum of not less than $2,500,000,000, as the total 
amount reduced ; and it may be almost twice as much. 

Somebody profits by all this loss. Who' is it ? The mortgagee, 
who enters upon possession — first selling out his poor debtor, 
whether the little farmer of the West, or the great proprietor of 
mills, mines, or furnaces in the East. — The usurer, who obtains 
one, two, three, or even five per cent, per month, until the poor 
borrower is ruined. — The government official, whose salaries and 
perquisites have been already doubled, trebled, and quadrupled, 
and will be now increased in value, while the working men around 
him suffer, if even they do not perish, for want of food. — The 
member of Congress, whose salary has been doubled, because of 
the rise in the price of food, and will so remain, now that its 
price has fallen. — The non-producers are thus enriched, while 
the men of enterprise, and the laborers, are despoiled. 



* In the four years which followed the bankruptcy of 1841, when specu- 
lation had ceased, and when all were required to work, the cotton crop was 
greater by a total of 2,000,000 bales, than in the four previous ones. Nine 
years since, the crop had reached 2,800,000 bales; and now, with favorable 
seasons, there exists no reason why it should not attain the quantity of 
4,000,000 bales. The land is prepared for it, and the people are there to 
work it. The crop must largely increase, and the European demand must 
lessen, because, with the decline in the price of food, of which our policy will 
be the cause, the ability of European farmers to purchase cloth must decline. 



PRESIDENT OF THE UNITED STATES. 



21 



Turning now to the Treasury, we find it already bankrupt, even 
at the commencement of this downward movement. Irredeemable 
paper being now to be substituted for gold and silver, the influx 
of foreign merchandise, and the efflux of the precious metals, will 
be much promoted; and thus will the way be smoothed, towards 
total bankruptcy, such as was witnessed in 1841 and 1842. 

Such, Mr. President, being the material condition, present and 
prospective, of your fellow-citizens, we may now, for a moment, 
turn to their moral one. 

Commencing with the central government and its capital, we 
find an amount of official corruption not exceeded in the world, 
outside of the Turkish Empire — the affairs of the Union, for 
the past few years, having been administered with a single eye to 
the profit of official persons and their friends, and not with refe- 
rence to the interests of the people. Passing thence, to town, 
city, and county administrations, we find a continually growing 
power, on the part of the central government, to control and 
direct their elections, with correspondent growth of fraud and 
peculation. 

Turning now to the commercial capital, I find its situation 
thus described in a journal of the day ; and unfavorable as is the 
description, none, as I think, can deny its truth : 

"There is no town in Christendom where, in proportion to the 
population, an equal amount of crime is annually committed. We 
do not go much beyond the letter of the fact, when we say that 
murder is a thing here of daily occurrence. Villanous and das- 
tardly outrages are nightly perpetrated in the streets, and some- 
times in the open light of day. The city is the head-quarters of 
the rogues, thieves and pickpockets that are scattered throughout 
the country, and is the main theatre of their operations. Nowhere 
else in this country does vice plant itself so openly, and with such 
impunity. Nowhere is so much countenance given to rowdy 
gangs, that keep quiet people in terror. Nowhere have things 
gone on from bad to worse so rapidly, until it is at length appa- 
rent that unless some speedy change comes over the police 
management in New r York, and the administration of the criminal 
courts, a state of anarchy will ensue, or honest citizens will be 
driven to organize, and take the law in their own hands.'' 

Passing outward from New York, we find a rapid growth of 
rowdyism and intemperance, with corresponding decline in the 
security of person and of property — frauds, peculations, seduc- 
tions, murders, and crimes of every kind, increasing with such 
rapidity, as fairly to warrant the assertion in a recent Southern 
journal, that "the United States are fast becoming a very stench 
in the nostrils of mankind." * 



* "It is useless to wink at the fact. Villany, in every shape, is celebrating 
its horrid gala-day throughout the United States. Details of murders in our 



V 



33 LETTERS TO THE 

Such, Mr. President is the material and moral condition of the 
people, to the administration of whose affairs you have recently 
been called. Desiring to find its parallel, you will be led, most 
naturally, to look to the closing years of the free trade period, 
which preceded the passage of the protective tariff of 1842. Seek- 
ing its opposite, you will be led, as naturally, to look to the 
closing years of the protective periods, established by the tariffs 
of 1828 and 1842 — years, in which the country presented to view 
a picture of peaceful and quiet progress, such as the world had, 
theretofore, never seen. 

The tendency towards the establishment of a sound morality, 
Mr. President, in every country of the world, has been in the direct 
ratio of the steadiness and regularity of the societary movement 
— the gambling tendencies of the barbaric ages then tending to 
disappear. That principle being admitted, I would ask you to 
study the action of the central government, from the day on which" 
it assumed to control the monetary movement of the country, and 
satisfy yourself, as you readily may, that to its vicious course of 
action, and not to error in the local governments, we owe the de- 
moralization that now exists. As a member of the old Federal 
party, you will, I am sure, rejoice to find this fact established. 
That you may do so, I would beg you to look to the urgent 
recommendations of 1835, for the establishment of State banks, 



cities fill the columns of the journals. One reads of butchery until the very 
letters in the printed columns appear bloody; of arsons, until the light of con- 
flagration seems to throw its lurid glare throughout the apartment; of fraud, 
until a line of sleek, hypocritical, would-be-respectable men range them- 
selves before us ; and of crimes yet fouler and more bestial, until we tremble 
lest the lightnings of offended Heaven should descend from a cloudless sky, 
and overwhelm the earth in ruin." — Miner's Journal. 

" Official roguery has been rampant. There are customs prevalent, esta- 
blished by precedent, and endorsed by long usage, which, if now done for 
the first time, would be deemed larceny. The eagles are gathering together 
to-day at the Federal capital, and the jobbing, peculation, vote-yourself-a- 
prize system, will soon be in full operation. Common usage has given to 
certain doubtful practices the stamp of legality. He would be regarded as 
very verdant, and exceedingly unsophisticated, who should presume to call 
things by their right names in Washington, or to hint that the private gen- 
tleman who had so wasteful an array of servants, as the servants of the 
people at Washington, would forthwith discharge the whole set without a 
character. The treasury, one might think, is replenished annually for the 
benefit of these gentlemen. That they themselves think so, is palpable. — 
From this centre, the idea of official honesty, in States and municipalities, 
seems to have taken a like latitudinarian range. The finances of some of 
our cities are managed in a most unaccountable manner — literally unac- 
countable, for no accounts are rendered. Immense sums disappear, taxation 
annually increases, and the deficit keeps pace with the sums assessed. The 
public credit is shaken, municipal evidences of debt are dishonored, neces- 
sary public works stand still, repudiation is practically attempted, and all 
this time enough is squandered, and disappears by peculation, to keep 
the treasury more than ready for the lawful demands upon it." — North 
American. 



/I 



PRESIDENT OF THE UNITED STATES. 23 

followed by indignant denunciation of both banks and notes, and 
by the establishment of a department in the national treasury, for 
the supervision of local banks, from which is issued, annually, an 
enormous mass of figures, arranged with the intent to deceive their 
readers into the belief, that those who place confidence in banks 
will be defrauded. Look, next, to the speculations in public 
lands, which alwaijs folloiv the adoption of a policy tending 
towards the closing of our factories and furnaces, and thus 
enable gamblers and speculators to accumulate fortunes, at the 
expense of the poor emigrants who are driven from the older 
States. Look, again, to the enormous changes in the value of 
property of every description, resulting from the three suspen- 
sions, in time of peace, that have followed the centralization 
of the monetary power in the hands of the Federal executive. 
Look, then, to the facts, that "free trade/' the control of the 
central government over the currency, and the doctrine that "to 
the victors belong the spoils," had their origin at the self-same 
period. Further, look to the fact, that an ad valorem system, 
offering, as it does, a bounty upon the perpetration of fraud, 
drives the honest merchant from the business of importation. 
Look, I pray you, to the great fact, that, since the day on which 
the centralized system was adopted, the expenditures of the 
government have been quintupled — and that nearly seventy mil- 
lions of dollars, per annum, are now, at every election,, put up 
to the highest bidder. Look at the enormous changes in the 
prices of all our staples, consequent upon that exclusive depend- 
ence upon foreign markets, which it is the object of the centralized 
system to establish. Look at the gambling spirit, and the reck- 
lessness thereby engendered, and you will be at no loss to account 
for the demoralization that is in progress — a demoralization 
whose growth has, in the last few years, been more rapid, than in 
that of any country recorded in the history of the world. Having 
studied these things, Mr. President, you will, I think, be disposed 
to agree with me in opinion, that while the central government 
shall continue to pursue a course that, in effect, offers boun- 
ties for the perpetration of frauds and villanies, there can be no 
nope of change ; and that, unless there be a chauge, the day must 
speedily arrive, when the people, in their distress, will be found 
calling upon Providence, in its mercy, to send them a dictator, 
and thus relieve them from the oppression of that worst of all 
despotisms, a centralized democracy. 

Hoping, Mr. President, that, under reforms that you may insti- 
tute, the State authorities may become re-instated in the posses- 
sion of the powers of which they have been deprived, and that we 
may thus be enabled to retrieve our reputation, 

I remain, very respectfully, your obed't servant, 

Henry C. Carey. 

Philadelphia, December 28th, 185T. 



24 LETTERS TO THE 



LETTER FIFTH. 

Junius tells us, Mr. President, that "the ruin or prosperity 
of a state depends so much upon the administration of its govern- 
ment, that to be acquainted with the merit of a ministry we need 
only observe the condition of the people. If," as he continues, 
" we see them obedient to the laws, prosperous in their industry, 
united at home and respected abroad, we may reasonably pre- 
sume that their affairs are conducted by men of experience, abili- 
ties, and virtue. If, on the contrary, we see a universal spirit 
of distrust and dissatisfaction, a rapid decay of trade, dissensions 
in all parts of the empire, and a total loss of respect in the eyes 
of foreign powers, we may pronounce, without hesitation, that 
the government of that country is weak, distracted, and corrupt." 

The first of the pictures here presented exhibits the state of the 
American Union at the close of the war in 1815 ; again in 1834, 
at the date of the repeal of the protective tariff of 1828 ; and 
again in 1847, when the act of 1842 ceased to be the law of the 
land. The second is found on an examination of the condition 
of the country, in the period from 1818 to 1824, when protection 
had ceased, and when the legislatures of numerous' States had 
found themselves compelled to stay the action of the laws for the 
collection of debts; again in 1841-2, when "stay laws" were 
again resorted to, and when the Federal goverrnment was nearly 
bankrupt ; and, lastly, at the present period, when there reigns 
"a universal spirit of distrust and dissatisfaction " — when there 
are "dissensions in every part of the empire" — and when the 
"respect of other powers" has so nearly ceased to have exist- 
ence. 

In proof that such is the case, and, that the Union is rapidly 
declining in the estimation of the people of other nations, I beg- 
to offer you the following extract from a work just published, the 
author of which is not to be suspected of any disposition to mag- 
nify the changes he discovered : — 

"It is very evident, as I converse with people here, and in 
other parts of Northern Europe, that a great ehange has come 
over the popular feeling towards America, since I was last on the 
Continent, five years ago. Then America was the ideal every- 
where to free-thinking and aspiring men. The oppressed looked 
hopefully to it ; the philosopher found the confirmation of his 
theories of human liberty there ; the hard-working, the politically 
degraded, the idealists, the struggling masses, felt that the West- 
ern Republic was especially for them, and even if they could never 
share its privileges, they were happy that humanity had at length 
looked on such a glorious effort. The reports of the common 



PRESIDENT OF THE UNITED STATES. 



25 



freedom, of the education of the masses, of the high morality pre- 
vailing, came over even exaggerated, and silenced the enemies 
of popular rights, and converted many doubtful. One felt the 
effect of all this, as a traveller. You were not alone ; you were 
the representative of the best thoughts and aspirations of man- 
kind. The warm hand grasping yours, welcomed not you, but a 
nation of freemen. The rich did not condemn, because property 
and person had been better shielded under the Republic, than 
under European monarchies. The poor, the laborers, were espe- 
cially your friends, for was not your land the very land which 
elevated labor ? 

"All this is quite different now. You are treated politely, as 
a stranger ; or you are welcomed more or less for what you per- 
sonally are, but for your country, among the populace you get no 
welcome. The glory has departed. 

"Within five years, various circumstances have opened the 
eyes of Europe to our real situation, and, as often happens, the 
people see nothing but our sins. We are simply now a tricky, 
jobbing, half-barbaric people, where the worst political corrup- 
tion of the Old World extsts without its refinement ; and where 
brutality, rowdyism, and unlimited despotism have in certain 
quarters free play. Our politicians and diplomats are despised ; 
our Constitution is sneered at, as inflicting upon us the most dis- 
graceful legislators ; and the laboring class and the democrats 
know that within our limits, a more abominable tyranny over 
labor and free speech and thought exists, than the worst despot- 
isms of the Continent ever exhibited. There is nothing now in 
our situation to dazzle the world. They see with clear eye our 
blackest sins and our miserable political jobbing." * 

Such being the state of things in Northern, we may now look 
to Central Europe, in regard to which, I,- myself, Mr. President, 
can speak. Go where the traveller may, he finds, among thought- 
ful men — among those who had hoped to find, in this western 
world, the realization of their brightest hopes, in regard to man's 
onward progress — a growing doubt in reference to our future. 
Anxiously do they look across the ocean — dreading to hear of 
new, and more alarming, riots — new civil wars — new violations 
of local rights — new marauding expeditions — new aggressive 
wars. Ten years since, all was different. They would, then, 
have regarded as a false prophet, the man who had predicted : 

That, at the close of a single decade, the regular expenditures 
of the Federal government, in a time of peace, would reach seventy 
millions of dollars — being five times more than they had been, but 
thirty years before : 

That the recipients of this large amount, whether contractors, 
clerks, or postmasters, would be held liable for the payment of a 



* Brace.—" The Norse Folk," page 24. 



26 



LETTERS TO THE 



formal and regular assessment, to be applied to the maintenance 
in office, of the men by whom they had been appointed, or those 
by whom the contracts had been made : 

That payment of these assessments, would be made the condi- 
tion upon which their own continuance in office should depend : 

That, coincident with these demands upon the employes of the 
government, all salaries would be largely raised ; and that, thus, 
the treasury should be heavily taxed for purely party purposes, 
and for the promotion of private interests : 

That centralization would be so far perfected, as to enable the 
Executive to dictate to a body of officials, sixty or eighty thousand 
in number, all their modes of thought, in reference to questions 
of public interest : 

That a constantly growing difficulty of obtaining — independent 
of the government — the means of support, and constant increase 
in the rewards of public service, would be attended with corre- 
sponding increase in the number of claimants for office, and in 
their subservience to the men at whose pleasure offices were held : 

That the Executive would dictate to members of Congress 
what should be their course, and publicly advertise the offices that 
were to be given, to those whose votes should be in accordance 
with his desires : 

That the growing mental slavery thus indicated, would be at- 
tended by corresponding growth in the belief, that "one of the 
chief bulwarks of our institutions," was to be found in the physical 
enslavement of the laborer : 

That the extension of the area of human slavery would have 
become the primary object of the government ; and that, with that 
view, the great Ordinance of IT 87, as carried out in the Missouri 
Compromise, would be repealed : 

That, for the promotion of this object, the treaties with the poor 
remnants of the native tribes would all be violated : 

That, with the same end in view, wars would be made, piracy 
encouraged, and territories purchased : 

That the Executive power would so far have grown, as to enable 
it to adopt measures provocative of war, with a view to the spoli- 
ation of the weaker neighbors of the Union : 

That it would be officially declared that might makes right, 
and that, if a neighboring power refused to sell the territory 
whose possession was desired, the Union would then be justified 
in seizing it : 

That the reopening of the slave trade would be publicly advo- 
cated, and that the first step towards its accomplishment would 
be taken by a citizen of the United States — in rescinding all the 
prohibitions of the Central American governments : 

That the prohibition of slavery in a Central American State, 
would be considered sufficient reason for the rejection of a treaty : 

That the substitution, throughout all the minor employments 



PRESIDENT OF THE UNITED STATES. 



27 



of society, of slave labor for that of the freeman, would be publicly 
recommended by the Executive of a leading State : 

That, while always seeking territory in the South, the rights 
and interests of the people would be bartered away, for the sole 
and exclusive purpose, of preventing annexation in the North : 

That it would be declared, that the free navigation of Brazilian 
rivers was to be obtained, "amicably, if it could, forcibly, if it 
must " : 

That the effect would now be seen, in the entire alienation of 
the other communities of the "Western world : 

That the legislation of the country, would have fallen almost 
entirely under the control of navigation, railroad, and other 
transportation companies ; and that legislators would largely par- 
ticipate with their managers, in the profits of enormous grants of 
money, and of public lands : 

That there would have arisen a "third house of Congress " — 
composed of lobby members, and embracing men who had filled 
almost the highest legislative and executive offices — abundantly 
supplied, to use the words of Colonel Benton, "with the means 
required for conciliating members, and combining interests," and 
thus securing the passage of almost any bill, the applicants for 
which were willing, sufficiently liberally, to pay: 

That centralization would so far have grown, as to have caused 
the expenditures of a single city, to almost equal those of the 
Federal government, but thirty years ago : 

That the expenditure of city revenues, and the maintenance of 
public order, would be in the hands of magistrates, many of whom 
would be regarded as worthy only of the penitentiary: 

That the contest for the distribution of those revenues, would 
become so fierce, as to cause the purchase of votes to an extent, 
and at a price, before uuknown ; and that elections would be car- 
ried on by means of bowie-knives, pistols, and even by aid of 
cannon : 

That Lynch law would have found its way into the Senate 
chamber : that it would have superseded the provisions of the 
Constitution, throughout the Southern States : that it would have 
superseded the civil authority, in one of the States of the Union : 
that the right of the States to prohibit slavery within their limits, 
would be so seriously questioned as to warrant the belief, that 
the day was near at hand, when it would be totally denied : that 
all the decisions of the Supreme Court, for sixty years, favorable 
to freedom, would, by this time, have been reversed : that the doc- 
trine of constructive treason would be adopted in Federal courts : 
and that the rights of the citizen would be thus in equal peril, from 
the extension of legal authority on one hand, and the substitution 
of the law of force on the other : 

That polygamy and slavery would go hand in hand with each 
other ;. and that the doctrine of a plurality of wives, would be pub- 



28 



LETTERS TO THE 



Itely proclaimed by men holding highly important offices under 
the Federal government : 

That manners, morals, or intellect, would cease to be deemed 
essential to the representation of the Union, at foreign courts : 

That religious discord would so far have grown, that the ques- 
tion of the private opinions of a candidate for the presidency, in 
regard to matters of religious faith, would be discussed through- 
out the Union : 

That the discord between the Northern and Southern portions 
of the Union would have reached the point of civil war, attended 
with a growing disposition, in its various portions, to look com- 
placently upon the idea of dissolution : and, finally, 

That Germany, divided and distracted as it was, before the 
formation of the Zoll-Verein, was likely to be reproduced in this 
Western world — the Union tending steadily towards a dissolution, 
the result of which would be, that the several fragments would 
become mere tools in the hands of other powers. 

This is a gloomy picture, and yet it is a true one. Not one of 
these things would, a few years since, have been believed to be of 
possible occurrence ; and yet, with the exception of this last, they 
are, one and all, now matters of history. 

How they have tended to the production of changes in the 
modes of European thought, is exhibited, Mr. President, in a recent 
British journal, in which, after showing, that the idea of the vote 
by ballot, of " manhood suffrage," and of " household suffrage," 
had nearly passed away, the writer proceeds to say that — 

" This revulsion of sentiment and opinion is in a great measure 
traceable to the spectacle of the American democracy. We owe 
a deep debt of gratitude to the United States for the pregnant les- 
sons they have taught us, and the timely warnings they have 
given. * * * A few years ago the substantial, deep-seated, 
long-descended fabric of English liberty was in danger from the 
blind but honest enthusiasm of the sincere friends of popular insti- 
tutions : now, if we succumb to that peril, we shall be wrecked 
with our eyes open. The tide has somewhat ebbed, and the rock 
is above water. Let us inquire a little more in detail what the 
warnings that have come to us across the Atlantic are. " 

The time has been, Mr. President, when you and I, and all of 
us, were accustomed to believe, that the great republic of the 
West was to be the pillar of light, guiding the oppressed of the 
world in their search for freedom. Widely different from this, it 
has, as here is shown, become Hie beacon light, whose only use is 
that of warning the world, against the shoals and sands, among 
which our ship is likely to be wrecked. Turn back, Mr. Presi- 
dent, a little in our history — finding the pages in which are 
recorded the early efforts of the central power to obtain direction 
of the currency, and you will, as I think, find the origin of all 
these changes. From that day to the present one, with slight 



PRESIDENT OF THE UNITED STATES. 



29 



exceptions, centralization has grown steadily; and yet, strange 
as it may appear in a patriot like yourself, the whole tendency of 
your message, is in the direction of further centralization. 

The more perfect the form of the ship, the more rapid will be 
her passage through the water, and the more certainly and 
speedily will she, under proper guidance, reach her destined port. 
The more rapid and complete, however, will be her destruction, 
should her pilot run her upon the rocks that lie in her course — 
the reaction then produced, being in the direct ratio of her pre- 
vious action. So is it with nations. The higher their organiza- 
tion, the more rapid is the movement of society, and the more 
instant is the shock that attends a stoppage in the circulation. 
The passage of an invading army through Peru, or Mexico, pro- 
duces little effect, beyond a small destruction of life and property ; 
but a similar event in England, would cause the closing of fac- 
tories, the stoppage of mills and furnaces, the abandonment of 
mines, the dispersion of the people, and the suspension of all the 
machinery of local government. The power of recuperation 
exists, however, in the same degree — the recovery from the 
effects of war, in countries like France or England, being much 
more rapid than it can be, where the societary circulation is lan- 
guid, and where the waste of property, or of population, can 
slowly, if even at all, be repaired. 

In no country of the world, do the effects of change become 
so promptly obvious, as among ourselves ; and for the reason, 
that — the political organization being here more natural than in 
any other — the tendency to rapidity of circulation is so very great. 
Universal instruction throughout the northern portion of the Union, 
tends to the production of great mental activity ; and, whatever 
maybe the direction in which the ship of State is guided, the 
movement towards the rocks on the one hand, or the haven on 
the other, is here most rapid. Such being the case, it is easy to 
account for the sudden and extraordinary changes, that are here 
exhibited, and, that so much surprise the people of other lands. 
In the decade that followed the passage of the tariff of 1824, 
there was effected a greater improvement than had ever before 
been witnessed in any country — the people having passed from a 
state of poverty to one of wealth — the country having become so 
attractive, as to cause, in the following years, a vast increase of 
immigration — and the government having passed from a condi- 
tion in which it required, for its support, to borrow money, to 
one in which — the public debt having been extinguished — it 
became necessary to emancipate from duty all the commodities 
that did not enter into competition with those produced at home. 
Nevertheless, but seven years later, the people and the govern- 
ment, both, were bankrupt ; the circulation of society had almost 
stopped ; and pauperism, to an extent that was alarming, pre- 
vailed throughout the country. The cause of this was to be 



80 



LETTERS TO THE 



found in the fact that protection had been abandoned. Again, 
in 1842, the system was changed; and, before the close of the 
first five years, the whole appearance of the country was changed 
— the circulation of society having become rapid, the credit of 
the people and the government having been restored, and the 
country having once more been rendered so attractive as to cause 
a large increase of immigration. Again, at the close of 1846, 
was the system changed — protection having been then aban- 
doned, and free trade then again inaugurated into power ; and 
now, at the close of the first decade, we witness a decline more 
rapid, and more pervading, than is recorded in the history of any 
country of the world. 

Why it is, that such are the effects produced, will be shown in 
another letter, from 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, December ZQth, 1857. 



PRESIDENT OF THE UNITED STATES. 



31 



LETTER SIXTH. 

Before proceeding, Mr. President, to an examination of the 
manner in which the policy of the central government has tended 
towards producing the demoralization, that has now become so 
clearly manifest, I would beg to call your attention to a simple, 
but highly important, principle of social science, which may thus 
be stated : 

A thousand tons of rags, at the Rocky Mountains, would not 
exchange for a piece of silver of the smallest conceivable size ; 
whereas, a quire of paper would command a piece so large, that 
it would weigh an ounce. Passing thence eastward, and arriving 
in the plains of Kansas, their relative values, measured in silver, 
would be found to have changed so much, that the price of the 
rags would pay for many reams of paper. Coming to St. Louis, 
a further change would be experienced — rags having again risen, 
and paper having again fallen. Such, too, would prove to be 
the case, at every stage of the progress eastward — the raw ma- 
terial steadily gaining, and the finished commodity losing, in price, 
until, at length, in the heart of Massachusetts, three pounds of 
rags would be found to command more silver than would be 
needed for the purchase of a pound of paper. The changes of 
relation thus observed, are exhibited in the following diagram : — 




jttags..._ 
Cotton. 



The price of raw materials tends, thus, to rise, as we approach 
those places in which wealth most exists — those in which man is 
most enabled to associate with his fellow-man, for obtaining 
power to direct the forces of nature to his service. The prices of 
finished commodities, move in a direction exactly opposite — 
tending, always, to decline as those of raw materials advance. 
Both tend, thus, to approximate — the highest prices of the one, 
being always found in connection with the lowest of the other ; 
and, in the strength of the movement in that direction, is 
found the most conclusive evidence of advancing civilization, 
and growing commerce. 

The tendency towards advance in civilization being thus, Mr. 



32 



LETTERS TO THE 



President, everywhere, in the direct ratio of the approximation 
of the prices of the rude products of the earth, and those of the 
commodities into which they are converted, the test of the value 
of every measure, is to be found in its tendency to produce, or to 
prevent, that approximation. So examined, the protection ex- 
tended to shipping, would appear to have been productive of un- 
mixed good — ships having steadily become cheaper, while ship- 
timber has as steadily become dearer ; and the farmer having 
found freights declining from year to year, while a market was 
being made for portions of his trees, that, otherwise, would have 
been wholly valueless. 

With regard to the products of the labor given to cultivation 
— that labor which, when properly directed, tends most to expand 
the mind and improve the heart — it has been otherwise ; and be- 
cause, the policy of the country has looked almost entirely to 
foreign trade, to the exclusion of all measures tending to the pro- 
motion of internal commerce. The prices of raw material have 
steadily declined ; and, for the reason, that the obstacles to com- 
merce have increased, when they should have diminished. 

The average export price of flour, since the commencement of 
the present century, has been as follows : — 



Five years ending in Dollars. 

1805 9.05 

1810 7.50 

1815 11.60 

1820 9.15 

1825 6.20 

1830 6.20 

1835 5.70 



Five years ending in Dollars. 

1840 7.87 

1845 5.00 

1850 5.54 

Year 1850 5.00 

" 1851 4.77 

« 1852 4.24 



The facts here presented, being most remarkable, are worthy, 
Mr. President, of your most serious attention. The highest 
average is found in the period from 1810 to 1815 ; that one, in 
which there was, almost literally, no intercourse with foreign 
countries ; and that, in which the energies of the country were, 
more than they ever before had been, directed towards the estab- 
lishment of internal commerce.* A domestic market was then 
rapidly being created, the extent of which may be judged from 
the fact, that the cotton manufacture, which, in 1805, had required 
but a single thousand bales, absorbed, in 1815, no less than. 
90,000.t 



* In the last of these years, only, it was, that gold and silver coin had 
ceased to circulate, because of difficulties resulting from the events of the 
war. The stoppage took place in the autumn of 1814, and the Treasury 
year closes with the autumn of 1815. That, however, was one of the 
lowest years of the period. 

f Report of the Committee of Commerce and Manufactures, February 13, 1816. 
The effect of this large domestic demand, upon the price of cotton, is shown 



PRESIDENT OF THE UNITED STATES. 



33 



With the return of peace, however, the policy of the country 
was changed, and from the date of that change, we have an 
almost unbroken descent, until, in 1852, just prior to the opening 
of the Crimean war, it had reached the lowest point of the cen- 
tury ; and probably the lowest recorded in the country's history 
thus proving a constant increase in the obstacles standing be- 
tween the man who raised the wheat, and him who had money 
with which to purchase it. Directly the reverse of this, is what 
we see to have occurred in France, where the average price of 
wheat for thirty-five years, ending with 1848, remained almost 
stationary, although somewhat higher in the closing period than 
in the earlier ones. So, too, with both Russia and Northern 
Germany, in the first of which, the price of corn, in the decade 
ending in 1852, was one-half higher than it had been, in that 
ending in 1825 ; while in the last,' we find the average maintained 
with a steadiness contrasting strikingly, with the extraordinary 
changes occurring among ourselves, as here is shown : — 

Average of wheat Average of flour 

in Prussia, per schelTel.* exported from U. S. 

1816-25 66f§ groschen == $1.48 $7.57 

1826-35 55 r ^ " = 1.23 5.95 

1836-45 62 T 5 ^ " = 1.39 6.43 

1845-51 73-/L " = 1.63 5.41 

1852 68-j^ " = 1.51 4.24 

In the one, the price, towards tne close, is higher than in the 
preceding periods ; while in the other, it has fallen to little more 
than half. 

The course of events in the advancing countries of Europe — 
those which are following in the lead of Colbert, and of France 
— is, therefore, exactly the opposite of what is here observed ; 
but if we seek a case that is exactly parallel, it will be found in 
studying the operations of Ireland or India, Portugal or Turkey 
— countries which follow in the lead of England. In all of these, 
the prices of raw products, and those of finished commodities, 
are steadily receding from each other, with constant decline in the 
value of land and man, and constantly augmenting difficulty in 
obtaining the food and clothing required for man's support. 
Like these United States, they are becoming from year to year 
more dependent upon foreign trade, and less able to maintain 
commerce among themselves. 

Turning now, Mr. President, to the England of a century 
since, we find a precisely similar state of facts, and resulting, too, 



by the fact, that the average value of the cotton exports of 1815 and 1816 
exceeded $24,000,000; whereas, three years later, when the domestic manu- 
facture had almost disappeared, it sunk to $20,000,000. — Treasury Report, 
February 20, 1836. 

* A scheffel is l T 5 ^ bushels. 



34 



LETTERS TO THE 



from causes precisely similar — a growing dependence on distant 
markets, attended with increased necessity for the use of machi- 
nery of transportation — ships and wagons, sailors and wagon- 
drivers. . The price of wheat fell there, regularly, until, at length, 
it reached the very low point of 21s. 3d. per quarter, or little 
more than half a dollar a bushel — manufactures remaining high 
in price. So soon, however, as a market had been made at home, 
the price rose — nearly doubling in the very first decade, and fur- 
ther advancing to an average of 51s. 3d. ; at or near which point, 
it remained for five-and-twenty years. Cloth and iron, during all 
that time, were becoming cheaper — thus presenting, in the con- 
stant approximation of prices, the most unquestionable of all the 
evidences of advancing civilization. 

The whole quantity of food for which Great Britain then needed 
a foreign market was trivial to a degree — the average export in 
the decade ending in 1755, when the price was lowest, having 
been only 4,000,000 of bushels; and yet, small as it was, the 
necessity for going abroad to sell it, produced the whole of the 
effect above described. The regulating market of that day, having 
been the country on the Rhine — then the great seat of manufac- 
tures — the more that was sent to it, the lower was there the price, 
and the lower that which could be obtained at the place of pro- 
duction. The 4,000,000 of bushels thrown upon that market 
must have caused a reduction there, of not less than 10, and more 
probably 15, per cent. ; and that reduction extended itself to the 
whole British crop, whatever was its size. So soon, however, 
as a market had been made at home, British corn — ceasing to go 
abroad — ceased to affect the prices of foreign markets ; and then 
British prices rose to the extent we see them to have done, because 
of the double saving to the farmer from the diminution in the cost 
of transportation, and from the increase of prices in all the mar- 
kets of Continental Europe, from which supplies might otherwise 
have been drawn. The amount of that saving, probably, was 
$100,000,000 ; and it was the effect of an increase in the rapidity 
of the societary circulation effected, in the short space of twenty 
years, by the very simple process of bringing the consumer to the 
side of the producer. 

Look where we may, Mr. President, we find, that men become 
more civilized, as the. prices of raw materials tend to rise, and to 
approximate more nearly to those of the finished commodities 
required for man's consumption. Such being the fact, and our 
policy tending steadily in the reverse direction, you can readily 
account for the daily growing tendency, among ourselves, towards 
centralization and slavery, with their attendant demoralization. 
For further facts in reference to this great question, I must, how- 
ever, refer you to another letter. 

Yours, with great respect, 

Henry C. Carey. 

Philadelphia, January 1st, 1858. 



PRESIDENT OF THE UNITED STATES. 



35 



LETTER SEVENTH. 

No truth in science, Mr. President, is more readily susceptible 
of demonstration, than that of the liability of the man who must 
go to market, for the payment of the cost of getting there. It is 
one, which sad experience teaches every farmer ; and one, too, 
that the student may find demonstrated by Adam Smith. The 
corn that is twenty or thirty miles distant from market, sells for 
as many cents less, per bushel, than that which is close to mar- 
ket ; and the potatoes that are a hundred miles from market, are 
almost worthless ; while those raised near it, sell for thirty or forty 
cents a bushel — the difference between the two, being the tax of 
transportation. 

Another and equally important truth is, that the price of the 
whole crop is dependent upon that which can be obtained for the 
little surplus that must go abroad ; or paid, for the small quantity 
that must be brought from a distance. Give to any curtain dis- 
trict 10,000 bushels of wheat, more than is there required, and 
the crop will fall to the level of the price that can be obtainecl 
abroad, for those few bushels — although constituting, perhaps, 
but 3 per cent, of the whole. Let the same district, in the fol- 
lowing year, require 10,000 additional bushels, and the whole will 
rise to the level of the price at which they can be obtained — the 
difference between the two being, perhaps, as follows : — 

Admitting the crop to be 300,000 bushels, and that the price, when 

there is neither surplus nor deficiency, is $1 — the product is. $300,000 

The crop being larger, and a surplus requiring to be sent to a dis- 
tance, the price will fall to 75 cents — giving for 310.000 

bushels 232,500 

The crop being small, and 10,000 bushels being required from a 

distance, the price will be $1.25— giving for 290,000 bushels. 362,500 

The question here, between a high and a low price — differing 
to the extent of 66# per cent. — is dependent, altogether, upon the 
existence of a demand slightly below, or above, the quantity pro- 
duced. The former was the condition of the people of Great 
Britain, at the period referred to — the supply having been 
slightly in excess of the demand, and that excess compelling them 
to go to a distant market, with some '2 or 3 per cent, of the crop, 
the price received for which, fixed the price of all. They, them- 
selves, too, were constantly aiding in the depression of prices in 
that market, and the more they sent the less they obtained for it. 
So long as the prices in the home market were regulated by 



m 



LETTERS TO THE 



those in the foreign one, it would have been more profitable to 
them, to have thrown the surplus into the ocean than to have 
sold it. 

Identical with this, is now the condition of the American 
farmer; and therefore it is, that while the price of food — the 
raw material of " labor — is steadily rising in France, Denmark, 
■German}', Spain, and Russia, it here as steadily declines. Simi- 
lar, too, is their condition in this, that the whole quantity for 
which a foreign market must be found, is so small that, were it 
altogether wasted, the loss would be unfelt. Its waste, indeed, would 
be productive of great advantage to the farmer ; for, so long as 
all domestic prices are fixed by foreign markets, the effect of this 
trivial export, in crushing the foreign farmers, by a reduction of 
their prices, is accompanied by corresponding reduction of the 
domestic ones — the loss thence arising, extending itself to the 
whole of the food produced. 

The total amount of food of all descriptions, exported from the 
United States, and the prices of flour at the corresponding dates, 
have been as follows : — 



Period. Average export. Price of flour. 

1821-15 $13,000,000 $6.20 

1826-30 12,000.000 6.20 

1831-35 14.000,000 5.95 

1830-40 12,500,000 8.00* 

1841-45 16,000,000 5.16 

1846-50 39,000,000 (Irish famine) 5.44 

1850 26,000,000 5.00 

1851 22,000,000 4.73 

1852 26.000,000 4.24 



We have, here, a constantly growing necessity for resorting to a 
distant market, accompanied by a decline of prices amounting to 
35 per cent. \. but, if we compare 1850-52 with the period from 
1810 to 1815, when the home consumption was equal to the whole 
supply, the reduction is no less than 63 per cent. Admitting, how- 



* The facts of the last three years correspond precisely with those which 
occurred in the period from 1836 to 1840, when the price of flour, for the 
moment, ranged so high, preparatory to the great fall that was so soon after 
to take place. Then, as now, mills and furnaces had ceased to be built. 
Then, as now, emigration to the West was immense, and the combined force 
of the nation was being given to the creation of new machinery for pro- 
ducing food. Then, as now, production diminished, while consumption was 
maintained — the deficiency being made up by the contraction of debts to 
Europe, for an immense amount of cloths and silks, the power to pay for 
which had no existence. Then, as recently, there was great apparent pros- 
perity, as preparation for the universal bankruptcy of 1841-2. The prepa - 
ration now being made is similar in all its parts; and as the causes are the 
same, we may be assured that the effects will not be different. 



PRESIDENT OF THE UNITED STATES. 



87 



ever, that the prices of 1821-25 would be the standard, in the 
event of the creation of a domestic market, that would relieve the 
farmer from the necessity for going abroad, we obtain the result, 
that the same crops which now sell for $1,500,000,000 would then 
command $2,200,000,000 — making a difference of $700,000,000, 
which may be regarded as the actual price paid by the agricul- 
tural body, for the privilege of almost giving away food, to the 
extent of $26,000,000. 

The prices above given, are those of the ports of shipment, 
always greatly higher than those of the places of production. 
Were we now to add the saving of inland transportation, that 
would be consequent upon the creation of local markets, the dif- 
ference would reach $1,000,000,000; and this, too, when taking 
as the standard the prices of 1821-25, embracing years of almost 
universal distress throughout America and Europe. Were we 
to take the average of 1816-25 — $7.67 — it would reach 
$1,500,000,000. The average of all France for every decade 
of the last forty years, has exceeded 18 francs for the hectolitre of 
wheat — being the equivalent of $1.25 per bushel ; and the later 
periods are the highest of all ; whereas, they are here the lowest. 
The French average of the six years ending in 1852, for all 
France, must have been 50 per cent, greater than the average of 
those years for the whole of this country ; and yet, all that was 
required for bringing prices here to a level with those abroad, was 
the creation of a market for food to the extent of 626,000,000 — 
being less than 2 per cent, of the total product. To those who 
doubt this, it can be necessary only to say, that the differences 
here stated as likely to occur, correspond exactly with those 
that did occur in England, in the period between 1750 and 1770. 
Commerce then growing, and the circulation becoming rapid, the 
dependence on the trader diminished — every stage of that dimi- 
nution being marked by an increase in the value of labor and 
land. Here, on the contrary, the dependence on the trader 
steadily increases — every stage of its increase being marked by 
a decline in the price of food, by which the price of laud and labor 
must ultimately be regulated. 

It may, however, Mr. President, • be said, that the food con- 
sumers would suffer by such a course of operation. Directly the 
reverse of this, however, has been the case in all other countries ; 
and so would it be with us. At no period of England's history, 
have the evidences of growing civilization, as furnished by the 
approximation of the prices of raw materials and finished pro- 
ducts, been so great, as in the five-and-thirty years preceding the 
opening of the wars of the French Revolution ; and at none, has 
the condition of the people so much improved. Circulation 
became from year to year more rapid. Labor was from year to 
year more economized ; and as the power of accumulation is 



38 



LETTERS TO THE 



wholly dependent upon such economy, it followed, necessarily, 
that wealth most rapily augmented. Land and man, in that 
period, almost doubled in value ; and all because of the relief 
from the tax of transportation, resulting from the growth of com- 
merce. So, too, in France. At no period in the last two cen 
turies, has corn been so low in price as in the days of Louis XY.; 
and yet, at none, have the people so much suffered from the want 
of food. Commerce then had scarcely an existence. Since then, 
the price has rapidly increased — enabling the farmer to gain on 
both hands : first, by obtaining more money for his corn ; and, 
second, by obtaining more cloth for his money. Farm wages 
rise ; and with that rise, there is, necessarily, a constant augmen- 
tation of wages in every other pursuit — it being only by tempt- 
ing the people of the country, to come to the towns, that factories 
can obtain supplies of labor. Desiring, then, to ameliorate the 
condition of man, we must begin with the laborer on the land — 
his wages being the standard by which all others are to be com- 
pared ; and that by which they are regulated. The more close 
the approximation of the prices of raw materials and finished 
commodities, the higher will be the wages, and the greater the 
tendency towards civilization. 

As it was in England, and as it is now in France, so would it 
be among ourselves. The work of making a market for the food 
that is now exported, would make a demand for muscular and 
mental force — enabling each and every man to sell his services, 
and to purchase those of the people around him. Labor being 
in demand, its price would rise ; and the more rapid the rise, the 
more it would be economized ; the greater would be the power 
of accumulation; the more abundant would become the machinery 
required for enabling him to call the forces of nature to his aid ; 
the larger would be the proportion of the mental and physical 
force of the community given to developing the treasures of the 
earth ; and the larger would be the reward of labor, in food and 
clothing. Commerce would then grow rapidly, but the power 
of the foreign trader would, then, as much decline — precisely as 
we see to have been the case in both France and England, at the 
periods above referred to. 

The proposition, that civilization grows in the direct ratio of 
the removal of obstacles standing between the producer and the 
consumer, and the consequent approximation of the prices of the 
products of the earth in their rude and finished forms, is a great 
and universal law, to which no exception can be found. Being 
so, it follows, necessarily, that raw materials should rise in price 
as finished commodities are cheapened ; that civilization should 
advance with the advance in the price of those materials ; and 
that that civilization should exhibit itself in the form of increased 
power of combination, increased development of individuality, in- 



PRESIDENT OF THE UNITED STATES. 



39 



creased sense of responsibility, and increased power of progress- 
Thus far, the policy of the Union, as we have seen, has tended 
in an opposite direction — towards lessening steadily the price of 
food ; and as such progress tends inevitably towards barbarism, 
it is here we find the fundamental cause of the extraordinary 
demoralization, now so rapidly in progress. — In another letter, 
Mr. President, I propose to show, that the facts in regard to 
the great staple of the South are precisely the same as those 
above described. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, January tth, 1858. 



40 



LETTERS TO THE 



LETTER EIGHTH. 

Turning now southward, Mr. President, we may look to our 
other great staple, Cotton, with a view to see if the course of 
operation has been the same. That it has been so, you may 
readily be satisfied. 

The crop of 1814 was estimated at 70,000, 000 of pounds, of 
which more than 8,000,000 were converted into cloth in the coun- 
try within thirty miles of Providence — the total domestic con- 
sumption having amounted to 90,000 bales, or nearly 30,000,000 
of pounds. In the seven years following, the crop rose succes- 
sively to 106,000,000, 124,000,000, 130,000,000, 125,000,000, 
167,000,000, and 160,000,000; but the home manufacture as 
steadily declined — producing a constantly increasing necessity for 
pressing upon the foreign market, with results such as are here 
exhibited : 



Export 1815 and 1816 
" 1821 and 1822 
'< 1827 to 1829 



average 80,000,000 
" 134,000,000 
" 256,000,000 



total price $20,500,000 
" 21,500,000 
" 26,000,000 



The quantity, as we see, had more than trebled, while the 
receipt therefor, had increased but little more than 25 per cent. 
The prices here given, being those of the shipping ports, and the 
quantity to be transported having so much increased, and having 
required so great an extension of cultivation, it is, I think, rea- 
sonable to assume, that the planter in those years gave 256,000,000 
of pounds — receiving, in exchange, no larger amount of money 
than, six years previously, he had received for less than a third 
of that quantity. 

1830 to 1832 average, pounds, 280,000,000 $28,000,000 

1840 to 1842 " " 619,000,000 55,000,000 

1843 to 1845 " " 719,000,000 51,000,000 

We have, here, an addition to the quantity of 1815-16, amount- 
ing to no less than 630,000,000 of pounds, and requiring nine 
times the amount of inland transportation — even admitting that 
the area of cultivation had remained the same. We know, how- 
ever, that, in that period, it had quadrupled, and must have re- 
quired fifteen, if not even twenty times as large a force of men, 
horses, and wagons, to do the work. Allowing for this, Mr. 
President, you will readily see that the planter must, in these 
years, have been giving 700,000,000 of pounds, for less than 
twice the quantity of money that, thirty years before, he had 
received for 80,000,000. 

1849 pounds, 1,026,000,000 $66,000,000. 

Here we have nearly 940,000,000 to be transported, additional 



PRESIDENT OF THE UNITED STATES. 



41 



to those of 1815-16 ; and from an area of cultivation that, because 
of the unceasing exhaustion of the soil, had been again enormously 
extended.* Such being the case, it may well be doubted, if the 
actual quantity of money, or money's worth, that reached the 
planter, in exchange for these 1,034,000,000, was much more than 
twice as great as that his predecessors had received for 80,000,000. 
Making the smallest allowance for additional transportation, he 
was here giving three pounds, for the same money that before 
had been received for one. 

1850-1851 average, pounds, 781,000,000 $92,000,000 

The great fact is here presented, that the less cotton the 
planter sends to the foreign market, the more money he re- 
ceives. In this case, there is a saving of internal transportation, 
as compared with 1849, upon 245,000,000 pounds, and an in- 
crease of gross receipt, amounting to $26,000,000. Allowing 
for the additional freight, as compared with 1821, the producer 
was now not giving more than two pounds, for the price received 
before for one. 

1852 pounds, 1,093,000,000 $88,000,000. 



* The following paragraph is from a speech of a distinguished citizen of 
Alabama, and exhibits the action of the system in a State that but forty 
years since had no existence : — 

"I can show you, with sorrow, in the older portions of Alabama, and in 
my native county of Madison, the sad memorials of the artless and exhaust- 
ing culture of cotton. Our small planters, after taking the cream off" their 
lands, unable to restore them by rest, manures, or otherwise, are going fur- 
ther West and South in search of other virgin lands, which they may and 
will despoil and impoverish in like manner. Our wealthier planters, with 
greater means, and no more skill, are buying out their poorer neighbors, ex- 
tending their plantations, and adding to their slave force. The wealthy few, 
who are able to live on smaller profits, and to give their blasted fields some 
rest, are thus pushing off the many who are merely independent. Of the 
twenty millions of dollars annually realized from the sales of the cotton crop 
of Alabama, nearly all, not expended in supporting the producers, is re-in- 
vested in land and negroes. Thus, the white population has decreased, and 
the slave increased almost pari passu, in several counties of our State. In 
1825, Madison County cast about 3000 votes; now, she cannot cast exceed- 
ing 2300. In traversing that county, one will discover numerous farm- 
houses, once the abode of industrious and intelligent freemen, now occupied 
by slaves — or tenantless, deserted, and dilapidated; he will observe fields, 
once fertile, now unfenced, abandoned, and covered with those evil harbin- 
gers, foxtail and broomsedge ; he will see the moss growing on the moulder- 
ing walls of once thrifty villages, and will find ' one only master grasps the 
whole domain' that once furnished happy homes for a dozen white families. 
Indeed, a country in its infancy, where, fifty years ago, scarce a forest tree 
had been felled by the axe of the pioneer, is already exhibiting the painful 
signs of senility and decay apparent in Virginia and the Carolinas." — C. C. 
Clay. 



42 



LETTERS TO THE 



Here is an increase, in the quantity requiring to be transported 
amounting to more than 300,000,000 pounds, accompanied by a 
diminution of gross receipt, amounting to $4,000,000 ; and a 
diminution of net receipt, that cannot be estimated at less than 
$10,000,000. As compared with 1815-16, the planter must, here, 
have been giving five pounds, for the price he before had received 
for one. 

The course of things, above described, is without a parallel in 
the history of the world. In the natural order of affairs, the cul- 
tivator profits by improvements in the machinery of conversion, 
his products rising in their prices, as the finished commodities fall 
— rags becoming dearer, as paper becomes cheaper — and wool 
going up, as cloth goes down. Here, however, all is different. In 
the forty years above referred to, each and every one has brought 
with it some improvement in the modes of converting cotton into 
cloth, until at length the labor of a single person is more pro- 
ductive than that of four or five had been before ; and yet, so far 
are those improvements from having been attended with any in- 
crease of price, that we find the planters giving steadily more and 
more cotton f$r less money — and thus affording the most conclu- 
sive proof of a tendency towards barbarism. 

The cause of all this being, as we are told, that too much cot- 
ton is produced, the planters hold meetings with a view to reduc- 
tion in the quantity ; and yet, from year to year, the crop grows 
larger; the area, over which it requires to be grown, becomes 
more and more extended ; and the net proceeds decline in the 
proportion they bear to the population of the States in which it 
is produced. In 1815, that population amounted to 2,250,000, 
whereas, in 1850, it exceeded 6,000,000. In the first, the gross 
proceeds of 80,000,000 pounds were $20,500,000; whereas, in 
1849, 1,026,000,000, with all the vast increase of freight, were 
given for $66,000,000 ; and the total gross proceeds of the crop 
could but little have exceeded $80,000,000. Struggle as the 
planters may, the case is still the same — they being required to 
give, from year to year, more cotton for less money ; and that, too 
in defiance of a great natural law, in virtue of which, they should 
have more money for less cotton. 

We are thus, Mr. President, presented with the remarkable 
fact, that the two chief products of the Union are steadily decli- 
ning in their power to command money in exchange ; and that, 
so far are the farmer and planter from dividing with the consumer 
of their products, the advantages resulting from improved machi- 
nery of transportation and conversion, that the latter gets it all, 
and mo7-e — the former obtaining less money, the more produce 
he has to sell. 

It is asserted, however, that all this is in strict accordance with 
some great law, in virtue of which every thing tends to become 
cheaper ; but a brief examination of the general movement of 



PRESIDENT OF THE UNITED STATES. 



43 



prices will probably satisfy you that the only law with which it is 
in accordance, is that human one, denounced by Adam Smith — 
having for its object the cheapening of the raw products of the 
earth, the establishment of the supremacy of trade, and the reduc- 
tion of man to the condition of a mere instrument to be used by 
the trader ; or, in other words, to that of a slave. 

In England, the price of sheep's wool has doubled in the lasi 
eighty years ; and that, too, notwithstanding the extraordinary 
extent to which cotton, in that period, has been substituted for 
wool. Had there been any commodity whatsoever, by which the 
theory of reduction of prices could have been supported, this 
would certainly have been the one ; and yet, the facts are directly 
opposed thereto. In France, too, wool has greatly risen. In 
Germany, it is now so much higher than it was thirty years since, 
that that country has become a great importer, where, formerly, it 
was a large exporter of this commodity. — Looking next to silk, 
we find the following remarkable illustration of the great law 
that lies at the foundation of all human progress. In the Re- 
port on the Commerce and Navigation of France, we have the 
official value, established about thirty years since, of all the com- 
modities exported and imported, side by side with their actual 
value, and are thus enabled to study the changes that are now 
going on, and measure their extent. How great they are, 
and how precisely they move in the direction that has been 
indicated, is shown in the fact, that while sewing -silks have 
fallen from 95 to 53 francs per pound, cocoons have risen from 
3 to 14 francs. 

Turning now to Ml". Tooke's valuable table of prices, in the 
period from 1*182 to 1838, and taking the first and last decades 
thereof, we obtain the following results : — 

1782 to 1791. 1829 to 1838. 

Bristles per cwt. £6 lis. OOd. £15 12s. OOd. 

Flax per 9 head 1 7 00 2 3 10 

Oil per ton 40 00 00 48 00 00 

Butter percwt. 2 10 10 3 16 00 

Irish mess-beef ...per tierce 3 10 10 4- 18 00 

Tallow per cwt. 2 1 00 1 19 6 

Timber, fir per load 2 4 00 2 8 00 

Whalebone per ton 150 00 90 215 00 00 

In all these cases, the producer was profiting by the increased 
facilities of transportation and conversion — obtaining larger prices 
for all he had to sell, with constant increase in his power to im- 
prove his own machinery, and thus augment the quantity pro- 
duced; whereas, in those of flour and cotton, he is seen to have 
been receiving smaller prices, with constant diminution of quan- 
tity, resulting, as will be shown, from the constant exportation 
of the elements of which flour and cotton are composed. 



44 



LETTERS TO THE 



We are told, however, that in the case of cotton, decline of 
price is the necessary consequence of a growth in the supply 
exceeding the wants of the world ; and therefore it is, that the 
planters hold meetings, for the purpose of devising measures tend- 
ing to the limitation of the quantity to be grown. In so doing, 
however, they are only repeating the operation performed at an 
earlier period in Virginia, in reference to tobacco ; and thus it is, 
that like causes produce like effects. The real difficulty, Mr. Pre- 
sident, is now, as it then was, to be found in the total absence of 
diversification of employments — producing a necessity for un- 
ceasing waste of labor, and unceasing exhaustion of the soil, 
accompanied by a destruction of the value of the land, and of the 
man by whom it is cultivated. That such is certainly the case, 
Mr. President, I propose to furnish further evidence, in another 
letter, remaining meanwhile, 

Yery respectfully, 

Yours, 
Henry C. Caret. 

Philadelphia, January Uh, 1858. 



PRESIDENT OF THE UNITED STATES. 



45 



LETTER NINTH. 

The reduction in the price of flour, and of cotton, is not, as 
you, Mr. President, have seen, in accordance with any general 
law. On the contrary, it is in direct opposition to a great law 
whose existence is everywhere manifest. Neither is the reduction 
in the price of cotton a consequence of any excess in the quantity 
produced, as you will be satisfied when you reflect, that the total 
quantity produced in the world does not equal two pounds per 
head ; whereas, the quantity that should be used, cannot be 
limited to ten, or even twenty, pounds per head. Such being the 
■jase, the difficulty, it is clear, does not lie in the excess of pro- 
duction, but in the deficiency of consumption. Could the cause 
of this deficiency be discovered, and a remedy be applied, the 
planter might go on increasing his quantity from year to year — 
the price of his cotton steadily rising, and that of cloth as steadily 
falling, precisely as we see to be the case with rags and paper, 
cocoons and silks, sheep's wool and cloth, flax and linen. 

The larger the price of corn, the greater must be the power of 
ihe farmer to purchase cloth, and the greater the quantity of 
iiioney obtainable by the planter in return for any given quantity 
jf cotton. The tendency of American policy, however, is towards 
reducing the price of corn throughout the world j and, as a neces- 
sary consequence, towards destroying the power of the people of 
France and Germany, Russia and Austria, England and Ireland, 
to purchase cloth. That such is the case, will be obvious to you, 
Mr. President, when you shall have reflected, for a moment, upon 
the effect that is now so obviously produced, by an increase in 
our export ; and upon that which would be produced, were it 
possible at once to say, that no more food would go from America 
to any country of the world — we having followed the advice of 
Adam Smith, when he advised that tons of food should be com- 
bined with wool, so as to enable both to travel cheaply to distant 
lands. Such a measure would, at once, relieve the European 
market from the pressure by which it is now kept down, and the 
price of English and Irish food would rapidly advance — afford- 
ing inducement to the extension of cultivation, and making demand 
for labor, with large increase of wages, and consequent increase in 
the power to purchase cloth. German food and German land 
would rise, and so would those of France and Russia, Austria 
and Spain. Agriculture thus receiving a new impetus, agricul- 
tural labor would rise in price — rendering indispensable an in- 
crease in the w T ages of factory labor. What is needed throughout 
the world is, rapidity of circulation, making demand for labor 
and its products. Centralization is opposed to this — producing 



46 



LETTERS TO THE 



stagnation everywhere, and compelling the planters of the world 
to give a constantly increasing quantity of their commodities — 
sugar and cotton — for a constantly diminishing quantity of 
money. Nearly all the countries of Europe having followed in 
the lead of France, in the effort to produce decentralization, the 
effect is seen, in the rise that has there taken place, in the prices 
of food and wool. 

Such would be the effect, among ourselves, of the adoption of 
the policy that, there, has been productive of such results. The 
measures required for making a domestic market for food — thus 
relieving the farmers of Europe from American competition — 
would produce rapid circulation of labor and commodities, and the 
American farmer would soon obtain as much for his corn, as is paid 
in France or England. The rise in the price of agricultural labor 
would be followed by rise in that which was otherwise employed. 
Labor becoming from day to day more productive, at the close of a 
few brief years, the domestic consumption of cotton would be thrice 
as great as now, with corresponding diminution in the quantity 
pressing on the market of Europe — enabling the planter to obtain 
for large crops a higher price, per pound, than he now receives 
for small ones. 

Adam Smith denounced the British system of his time, because 
of its being based upon the idea of cheapening all the raw mate- 
rials of manufacture — labor and the products of the land. The 
system of the present day looks to the production of the same 
results ; and therefore is it, that, in accordance with the ideas of 
Dr. Smith, it has been resisted by all the civilized nations of the 
world — America alone excepted. In all of them, consequently, 
raw produce is rising in price, while here, alone, is found a civi- 
lized community, in which the produce of the land has steadily, 
during half a century, declined in price — the farming and plant- 
ing interests having been most consistent, in the pursuit of a policy 
tending to diminish the quantity of money to be received, in ex- 
change for a bale of cotton, or a barrel of flour. 

The evidences of growing civilization, Mr. President, are to be 
sought in two directions : first, in the rise in the prices of the raw 
products of the earth ; and, second, in the decline in those of the 
manufactured commodities required for human purposes. So far 
as regards the first, that evidence has not been here obtained — 
both flour and cotton having steadily fallen in price, to the great 
disadvantage of those by whom they are produced. The manu- 
factured commodity that, more than any other, is required by the 
farmer and the planter, is Iron, and we may now turn to it, with 
a view to ascertain if we can find in that direction, the evidence of 
growing civilization with which, thus far, we have failed to meet. 
Doing so, we ascertain that, in 1821 and 1822, the average price 
of bars at Glasgow, was £10 14s., or $51.36, a ton, at which rate 
the 100,000,000 of pounds of cotton then shipped would have 



PRESIDENT OF THE UNITED STATES. 



47 



paid for, at that port, abont 450,000 tons — leaving $3,500,000 
to defray the inland expenses of sending the cotton to the port of 
shipment. Turning now to the four years ending in 1855, we find 
that the average price of bars has been $38.50 per ton, and that 
the quantity of cotton that has been shipped, has averaged 
1,050,000,000 pounds, producing at the port of shipment an ave- 
rage of $94,500,000 — deducting from which, the inland expenses, 
the planters might have received, probably, $80,000,000, with which 
they could have purchased about 2,100,000 tons — thus giving ten 
pounds for a smaller quantity of iron, than, before, they could have 
had for five. 

The price of flour, prior to the opening of the Crimean war, was 
lower, as, Mr. President, you have seen, than it had been for half a 
century ; and less, by nearly one-half, than it had been in the period 
from 1815 to 1825. In that period, the price of bar iron in Liver- 
pool averaged about £10; or but little more than that of the past 
four years — the fluctuations in these latter having been between 
£7 10s. and £9 12s. 6c?. The raw materials of labor — food and 
cotton — not only do not approximate towards iron, but become 
more widely separated from year to year. 

Still more strongly is this the case, when we compare the prices 
of food and cotton, with those of other rnetals; The raw mate- 
rials, iron and lead, have fallen in actual price, but copper and tin 
have both advanced, as will be seen by the following figures, de- 
rived from the work of Mr. Tooke, before referred to : — 



Turning next to the year 1852, at which time flour had fallen 
to little more than a third of the price at which it sold in the 
period from 1810 to 1815, we find that the average prices had still 
further advanced — copper having been £4 18s. — tin, £4 Ts. — 
and lead, £11. 

The whole value of these metals, is in the labor given to their 
extraction. That labor is the product of food and clothing — 
of corn and wool. The foreign raw materials, of which British 
labor is composed, are perpetually falling in price, while highly 
important commodities, received by the foreign producers in ex- 
change, as regularly rise; and that being the direct road to- 
wards centralization, barbarism, and slavery, we may now readily 
understand the causes of the existence of the extraordinary demo- 
ralization now in progress among ourselves. The road to free- 
dom and civilization, lies in a direction precisely the opposite 
of that which, thus far, has been pursued. That road is, under 
the lead of France, being travelled by all the advancing nations 
of Europe, and hence the improvement that becomes from day to 



Copper 

Tin 

Lead ... 



1782 to 1791. 

per cwt. £4 Is. 2c? 

per cwt. 4 13 

per 19-i- cwt 19 3 q 



£4 8s. Id. 
4 4 10 
18 3 00 



1829 to 1838. 



48 



LETTERS TO THE 



day more manifest in the growing harmony of all the various 
interests of which society is composed. The contrary road is, 
under the guidance of England, travelled by Ireland and India, 
Portugal and Turkey, as well as these United States ; and hence 
it is, that in all of them we see an increasing centralization and a 
constantly growing discord. Hence, too, it is, that in the land 
whence issued the Declaration that all men were born equal, it is 
now openly declared that "free society has proved an utter failure," 
and that bondage is the natural condition of the man who labors, 
be he white or black. 

The history of the Union, Mr. President, is an enigma — our 
words having been those of civilization and freedom, while our 
tendencies, with only occasional intervals, have been in the di- 
rection of slavery and barbarism. That such has been the case, 
was obvious to yourself, when you told your fellow-citizens, in 
your recent message, that, ' ' for more than forty years, the history 
of the country has been one of extravagant expansions in the 
business of the country, followed by ruinous contractions. At 
successive intervals," as you continued, "the best and most enter- 
prising men have been tempted to their ruin by excessive bank 
loans of mere paper credit, exciting them to extravagant importa- 
tions of foreign goods, wild speculations, and ruinous and demo- 
ralizing stock-gambling." 

That such, Mr. President, have been the facts, cannot well be 
questioned. "At successive intervals," we have abandoned the 
policy whose admirable effects in reducing the cost of transporta- 
tion, and thus diminishing the taxation of the farmer and the 
planter, were so well illustrated by Adam Smith, when he showed 
how cheaply the cotton and the wool could be carried to the re- 
motest parts of the earth, after having been combined in the form 
of a piece of cloth; and, in each and every one of those periods, 
we have seen precisely the phenomena you so well describe. 
Numerous banks having, then, been created, we have had "extra- 
vagant expansions," followed by "ruinous contractions." Enor- 
mous importations of foreign goods have been followed by the 
wildest speculations, and by the most "ruinous and demoralizing" 
gambling in stocks and public lands. At other intervals, all this 
has disappeared — the societary movement having become so quiet 
and tranquil, that successive years have passed without the 
slightest speculation. Inquiring, now, what have been those 
years, we find them to have been those in which the policy of the 
country — being in accordance with the ideas of Adam Smith — 
tended towards relieving the planter and the farmer from the 
tax of transportation. 

Such, Mr, President, having been the uniform results of change 
in the policy of the central government, the solution of the enigma 
may, as it appears to me, be found by any one who will carefully 
study the following simple proposition : Barbarism grows in the 



PRESIDENT OF THE UNITED STATES. 



49 



ratio of the export of the rude products of the laud, and conse- 
quent exhaustion of the soil. Civilization grows in the ratio of 
the ability to diminish the bulk of the products of the plantation 
and of the farm, and to restore to the soil the refuse of its pro- 
ducts — thus augmenting the productive power of the land, and 
enabling more and more people to live together. — In which of 
these directions we are to move, is dependent, Mr. President, upon 
the central government, and not upon the local ones, as you have 
seemed to think. Such being the case, it must be to modification 
in the action of the former, we must look for a diminution of these 
barbaric tendencies, to whose existence you have so properly 
called the attention of your constituents. That modification 
once obtained, each successive day will tend to add to our admi- 
ration of the men who, when employed in making the Constitution, 
so wisely left to the States the regulation of their local institu- 
tions, whether engaged in converting wool and food into cloth, 
or in aiding the exchanges of those who desired to borrow money, 
with those who had money to lend. 

Trusting that you will become convinced of this, I remain, 
Mr. President, 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, January Sth, 1858. 



4 



50 



LETTERS TO THE 



LETTER TENTH. 

Civilization, Mr. President — growing with the growth of 
wealth — -is indicated by improvement in the condition of man. 
Our condition, natural, moral, and political, having much dete- 
riorated within the last few years, it is needed that we seek the 
causes of the change, which must be found in diminution of our 
wealth. 

Wealth, Mi-. President, consists in the power to control and 
direct the forces of nature — resulting, first, from the possession of 
the necessary machinery, and next, from the possession of the 
knowledge how to guide it. The coal that is mined by a single 
man, is capable of doing as much work, as could be done by 
thousands of human arms. The power of steam employed in 
Great Britain, is estimated as being equal to the united forces 
of 600,000,000 of men; and yet, the total number of persons 
employed in the coal-mines of that country, is but 120,000, 
two-thirds of whom must be engaged in furnishing fuel for the 
smelting of ore, for the rolling of iron, and for household and 
other purposes. The entire population of the island, in 1851 was 
under 21,000,000, each one of whom, were the power thus acquired 
equally divided, would have the equivalent of nearly thirty willing 
slaves employed in doing his work — slaves, too, requiring neither 
food, clothing, nor lodging, in return for the service thus performed. 
Admitting that even so large a number as 60,000, were employed 
in the extraction of the fuel by which this power is supplied, it 
would give but 1 in 350 of the population, and less than 1 in 200 
of those who are capable of doing a full day's work. Such being 
the case, we obtain the remarkable result that, by means of com- 
bination of action, less than one-half of one per cent, of the adult 
population, is enabled to furnish fifty times more power than 
could be supplied by the whole number, were each man laboring 
by himself. 

To enable this fuel to do the work, it is, however, required, that 
man should play the part of engineer — substituting mental power 
for the physical force, that would otherwise be required. The engi- 
neer must have his engine, and for the production of engines there is 
needed a portion of the labor that, by their use, is to be economized. 
How small, however, is the proportion thus required, is seen from 
the fact, that the whole number of steam-boiler makers in Great 
Britain, in 1841, was but 34^9 ; and, as the total number of per- 
sons engaged in making steam-engines cannot be ten times greater, 
we thus obtain less than 35,000 as being so employed. Adding 
now together the miners and engine-makers, we obtain less than 
100,-000 as the total human force' given to the development of a 



PRESIDENT OF THE UNITED STATES. 



51 



natural one equal to 600,000,000 — the physical force of each 
being, thus, by means of association and combination, multiplied 
no less than six thousand times. 

Of all the communities of the world, there is none, Mr. President, 
at whose command has been placed an amount of power, at all to 
be compared with that of our Union — the quantity of fuel within 
their reach being, practically, as unlimited as is the air we breathe. 
It underlies a large portion of Pennsylvania, Maryland, Virginia, 
and North Carolina, while, throughout the regions of the West, 
it so much abounds as, in a great majority of cases, to be wholly 
valueless. So, too, with the material of which steam-engines are 
composed — iron ore- — the supplies of which are boundless in 
extent, and waiting only for the moment when we shall deter- 
mine to appropriate them to our use, and thus acquire wealth. 
To what extent it might be so acquired, is shown by the fact, that 
a single hundred thousand men, in Britain, furnish power, equal 
to more than sixty times the mere muscular force of the itohole 
adult male population of the Union.* 

To produce, among ourselves, the same effect, it is required, 
only, that we adopt the same measures that have there resulted 
in such a- wonderful increase of force; and thus do we arrive at 
the great fact, that by means of the proper direction of the labors 
of the one-hundredth part of the adult population of the Union, 
the power, or wealth, of the whole, might, in a brief period, be 
twenty times increased — each and every person, were the whole 
equally divided, being thus supplied with twenty slaves employed 
in furnishing fuel and food, clothing and lodging, while consuming 
no part, whatsoever, of the products of their labor. 

The treasures of nature are boundless in extent, the earth being 
a great reservoir of wealth and power — requiring for their full 
development only the carrying into full effect the idea expressed 
by the magic word, Association. That such is the fact, is seen 
in every case in which, because of local circumstances, our 
people find themselves enabled to combine their efforts for the 

* The question may, with great propriety, be ashed — "If power really is 
wealth, why is it that the people of England, with such a wonderful amount 
of wealth at command, are so poor as to have given rise to the idea of over- 
population?" The answer is, that all this power is being wasted in the 
effort to prevent the other communities of the world, from acquiring similar 
power, or wealth. While laboring to cheapen the labor and raw materials 
of the exterior world, she is enslaving the people of all countries subject to 
her influence, and thus producing the enslavement of her own. The harmony 
of interests being everywhere perfect, therefore it is, that every measure 
tending to deprive the Hindoo of the power to sell his labor, tends equally 
to lessen the ability of the British laborer to obtain food for his family and 
himself. Action and re-action are equal and opposite — the ball which stops 
the motion of another ball, being stopped itself. This is a great physical 
law, whose truth is obvious throughout the whole range of social science. 
Common sense, common honesty, and sound polic}^, look always in the samo 
direction. 



52 



LETTERS TO THE 



Accomplishment of some common object. Combination of action 
furnishes to every resident of New York, Philadelphia, or Boston, 
a slave employed in supplying him with water, or with light, at a 
cost so trivial as to be utterly insignificant, when compared with 
what it would be, were he obliged to live and labor alone, as did 
the emigrants of the days of William Penn. Combined effort 
enables us to pass from the shores of the Atlantic, to the banks 
of the Mississippi, in fewer hours, and at less expense, than 
but a few years since, were required for going from New York to 
Washington. To such effort it is due, that every child is supplied 
with instruction, such as would be wholly unattainable by the soli- 
tary settler. Combination of effort furnishes Bibles at a price so 
small, as to place them within the reach of the poorest person in 
the Union ; and it supplies, for two cents, a better newspaper than 
could, but a few years since, have been purchased at any price. 
To combination it is due, that the man of New Orleans can com- 
municate on the instant with his friend in Philadelphia — thus 
annihilating both time and space. 

Look where we may, Mr. President, we find new proofs of the 
advantage to be derived from association ; and yet men are every- 
where seen flying from their homes, and leaving behind them wives 
and children, parents and relatives — each one seeming desirous, as 
far as possible, to be compelled to roll his own log, build his own 
house, and cultivate his lonely field : and thus deprive himself of all 
the benefit necessarily resulting from combination with his fellow- 
men. In the passage to his solitude, he traverses immense plains 
abounding in the fuel by whose consumption he would so much 
increase his wealth and power — preferring, apparently, to continue 
to confine himself to the use of his arm, when, by calling nature to 
his aid, he might be enabled to substitute the qualities of his head 
for those of his arm, and pass from the labors of the ox to those 

Of THE MAN. 

In no country of the world, is there so great a voluntary waste of 
power as in these United States. In Ireland and India, in Turkey 
and Portugal, a similar waste takes place, but in none of these, 
is there even a pretence that the people direct their own course of 
action: Here, the reverse is the case, every man being supposed 
to constitute a portion of the government, and to aid in so directing 
its action as to enable him and his neighbors most to profit by the 
gifts of Providence ; yet, here it is, that men are most disposed 
to separate themselves, each and every one from each and every 
other — thus forfeiting all the advantages, that are elsewhere 
seen to result from the substitution of the natural forces, for those 
of the human arm. The waters of Niagara, capable of doing the 
work of millions of men, are allowed to run to waste ; and the 
coal-fields of Illinois, that, with the slightest effort, might be made 
to perform a hundred times more labor than is now performed by 



PRESIDENT OF THE UNITED STATES. 



53 



all the people of the Union, are held in almost as light esteem as 
would be a similar quantity of gravel, or of sand. 

Domestic commerce tends to the development of the treasures 
of the earth — to the utilization of every particle of the matter of 
which our planet is composed — to the development of human 
power — to diminution in the value of the commodities required 
for the support of man — and to augmentation in his own value, 
and in that of the land upon which he is placed. At every stage 
of its progress, local centres acquire a larger attractive power — 
the mill, the mine, the furnace, the rolling-mill, and the grist and 
cotton mills, becoming the places of exchange, and thus diminish- 
ing the necessity for resorting to the trading cities of the world. 
The man whose labors have been given to the production of wheat, 
is thus enabled to exchange directly with one neighbor who con- 
verts wheat into flour, and another who has changed coal and 
ore into iron ; with one who has converted wool into cloth, and 
another who has made rags into paper — at once economizing the 
cost of transportation, and obtaining the intellectual commerce 
required for enabling him to pass from the cultivation of the poor, 
to that of the richer soils. 

The desires of the trader look in an opposite direction — tend- 
ing, everywhere, to prevent the creation of local centres, and thus 
to increase the necessity for resorting to the great central cities 
of the world. Every stage of his progress towards power is, 
therefore, attended by an increase in the tax of transportation, 
and a diminution in the power of man — with constantly increasing 
exhaustion of the soil, requiring resort to new lands, to be in their 
turn exhausted. 

According to an eminent French economist, this country is, 
like Poland, specially dedicated to agriculture, to the exclusion 
of manufactures. Such, too, having been the opinion of some 
of those persons who most have influenced the action of the cen- 
tral government, the result is seen in an universal impoverishment 
of the soil, and of its owners, because of the enormous tax of trans- 
portation to which they have been subjected. According to these 
gentlemen, the raising of raw produce is the chief pursuit of man, 
and yet, small reflection could be required for satisfying them, 
that the raising of wheat was but one of the steps towards the 
making of bread ; and that the raising of cotton was but a stage 
in the process of producing cloth — cloth and bread, and not wheat 
or wool, being the commodities required for his use. Men perish 
of cold where trees most abound, because of the absence of the 
saw, or the axe ; and other men go naked, though surrounded by 
plants yielding cotton, because of their distance from the spinning- 
jenny and the loom. Man is placed on this earth to subject the 
forces of nature to his service — compelling her to yield the com- 
modities required for his use, and in exchange for the smallest 



r >4 



LETTERS TO THE 



possible amount of human effort. That that object maybe accom- 
plished, he is required to combine his efforts with those of his 
fellow-men — the farmer, the miller, and the baker, uniting for the 
production of bread ; the shepherd, the spinner, and the weaver, 
uniting for the production of cloth. The more perfect that 
union, the less is the waste of labor in transportation and in effect- 
ing exchanges, and the greater the power to improve the land 
already occupied, while extending the work of cultivation over the 
richer soils — as is now being clone in France, Denmark, Germany, 
and other of the advancing countries of Europe. The less the 
power of combination, the greater is the tendency to exhaustion 
of the soil, as is seen to be the case in Poland and Ireland, 
Turkey and Portugal, Jamaica and India, and every other country 
that, like the United States, gives itself, almost exclusively, to the 
work of scratching the earth. Of all the raw material required 
for the purposes of man, manure is the most important, and the 
least susceptible of transportation to a distance ; and therefore is 
it, that poverty, depopulation, and slavery, are the necessary 
consequences of the reduction of a community to dependence on 
the single species of effort required for compelling the earth to 
yield the raw material of clothing, or of food. Throughout the 
larger portion of the Union, the market is distant hundreds and 
thousands of miles, and the consequences are seen in the fact, that 
the soil is becoming almost everywhere exhausted — wealth thus 
diminishing, when it should increase. 

How it diminishes, has recently been shown by an eminent agri- 
culturist, from whom we learn : 

That, the potash and. phosphoric acid annually taken from the 
land, is worth, at the usual market price of these commodities, 
nearly $20,000,000 — scarcely any of which is ever returned : 

That, the ashes of 600,000,000 of bushels of corn are annually 
taken from the soil- — scarcely any of which are ever returned : 

That, the total annual waste of the mineral constituents of food, 
is "equal to 1,500,000,000 bushels of corn." 

"To suppose," says the author of these estimates — "to sup- 
pose that this state of things can continue, and we, as a nation, 
remain prosperous, is simply ridiculous. We have as yet much 
virgin soil, and it will be long ere we reap the reward of our 
present improvidence. It is merely a question of time, and time 
will solve the problem, in a most unmistakable manner. What 
with our earth-butchery and prodigality, we are each year losing 
l he intrinsic essence of our vitality. 

" Our country has not yet grown feeble from this loss of its 
life-blood, but the hour is fixed when, if our present system con- 
tinue, the last throb of the nation's heart will have ceased, and 
when America, Greece, and Rome, will stand together among the 
ruins of the past. 



PRESIDENT OF THE UNITED STATES. 



55 



"The question of economy should be, not bow much do we 
annually produce, but how much of our annual productions is 
saved to the soil. Labor employed in robbing the earth of its 
capital stock of fertilizing matter, is worse than labor thrown 
away. In the latter case, it is a loss to the present generation — 
in the former, it becomes an inheritance of poverty for our suc- 
cessors. Man is but a tenant of the soil, and he is guilty of a 
crime when he reduces its value for other tenants who are to come 
after him." 

Waste, such as is here described, Mi. President, is a crime, and 
it finds its punishment in the natural moral, and political decline, 
to which your attention has now been called. Look, almost, 
where the traveller may, he is struck with the wretched condition 
of that which, m tins country, is called agriculture — but which, 
in the civilized countries of Europe, would be denominated pure 
and simple robbery of the great bank, given by the Creator for 
the use of man. Its effects are shown in the facts, that, in New 
York, where, eighty years since, 25 to 30 bushels of wheat wer*» 
an ordinary crop, the average is now only 14, while that of Indian 
corn is but 25. In Ohio, a State that, but half a century since, 
was a wilderness, the average of wheat is less than 12 ; and it dimi- 
nishes, when it should increase. Throughout the West, the pro- 
cess of exhaustion is everywhere going on — the large crops of the 
early period of a settlement, being followed, invariably, by smaller 
ones in later years. In Virginia, throughout a large district of 
country once considered the richest in the State, the average of 
wheat is less than seven bushels ; while in North Carolina, men cul- 
tivate land yielding little more than that quantity of Indian corn. 
Tobacco has been raised in Virginia and Kentucky, until the 
land has been utterly exhausted and abandoned ; while through- 
out the whole cotton-growing country, we meet with a scene of 
exhaustion unparalleled in the world, to have been accomplished 
in so brief a period. The people who raise cotton and tobacco 
are living upon capital — selling their soil at prices so low, that 
they do not obtain one dollar for every five destroyed ; and as 
man is always a progressive animal, whether his course be up- 
ward or downward, we may now r readily understand the cause 
of the steady and regular growth of that feeling which leads to 
regarding bondage as being the natural condition of those who 
need to sell their labor. The supremacy of trade leads necessa- 
rily to such results ; and, as the wliole energies of the country are 
given to the enlargement of the trader's power, and to the aug- 
mentation of the tax of transportation, it is no matter of sur- 
prise that its people are* everywhere seen to be employed in 
" robbing the earth of its capital stock." Let the existing system 
be continued, and "the hour is surely fixed," when, in the words 
of the writer quoted above, "America, Greece, and Home, will 
stand together among the ruins of the past." 



\ 



56 LETTERS TO THE 

Allow me now, Mr. President, to call your attention, once again, 
to the diagram given in a former letter. Looking at it, yon find, 
at the left, production small, and the prices of the ruder products 
of the earth, very low indeed. Passing towards the right, you 
find, in Massachusetts, production larger, and prices higher — the 
farmer obtaining a greater number of bushels, and, for each bushel, 
a larger quantity of money. That is the road towards the im- 
provement in manners and morals, to which we attach the idea 
of civilization. The contrary road — from the right to the left- 
is the one which leads to that state of demoralization, to which 
we attach the idea of barbarism — the products of the earth then 
diminishing in quantity, with steady decline of prices. This last, 
Mr. President, is the road which, under the guidance of the cen- 
tral government, we are travelling ; and therefore it is, that each 
successive year brings with it new attacks upon the local powers, 
and new increase of the central power, with constant decline in 
the respect for the Constitution, and in the regard for individual 
rights. Men, Mr. President, become free, and communities rise 
in the estimation of the world, in the ratio of their development 
of a real agriculture. Both deteriorate in the ratio in which 
they find themselves driven to the work of robbing the soil. 
This I propose to show in another letter — remaining, meanwhile, 

Yours, very respectfully, 

Henry C. Carey. 



Philadelphia, January 11th } 1858. 



PRESIDENT OF THE UNITED STATES. 



57 




LETTER ELEVENTH. 

All men, Mr. President, desire to maintain commerce with 
each other — exchanging ideas and services, or commodities, in 
which those services are embodied. Some men desire to be 
employed in effecting exchanges for other men — standing be- 
tween them, in the various capacities of sailor and wagoner, 
trader and transporter, all of whom are merely instruments to be 
nsed by commerce. 

The greater the diversity in the employments of society, the 
greater is the power to maintain commerce, and the less is the 
necessity for the use of the instruments above referred to — the 
greater is the tendency towards increase in the productiveness of 
the soil — the larger is the return to agricultural labor — the higher 
are the prices of the rude products of the land — the cheaper 
became those finished commodities required for the use of the 
farmer — and the greater is the tendency towards that improve- 
ment of human condition, to which we are accustomed to attach 
the idea of civilization. 

The less, Mr. President, the diversity of employments, the 
greater is the necessity for the services of the ship and the wagon, 
the trader and transporter — the less is the commerce — the 
greater is the tendency towards exhaustion of the soil — the 
smaller is the return to agricultural labor — the lower are the 
prices of the rude products of the land — the dearer are clothing, 
knives, axes, and other finished products — and the greater is the 
tendency towards that deterioration of man's condition to which 
we are accustomed to attach the idea of barbarism. 

The great fact is thus presented to us, that where the land 
yields most largely, there the prices of the products of the farm 
are highest ; whereas, where it yields least in quantity, there the 
prices are lowest. — In Germany and France, the yield of the 
land is steadily increasing, while prices regularly advance. In 
this country, the yield decreases, while prices as steadily decline. 
Hence it is, Mr. President, that the phenomena presented to view 
by French and German society, are those of growing civilization ; 
while those we meet among ourselves, are those of advancing 
barbarism. 

Approximation in the prices of the rude products of the earth, 
and of the finished commodities required for human purposes, is, 
Mr. President, the most conclusive proof of growth in civilization. 
The more nearly they come together, the more does society 
tend to assume its natural form — the greater is the tendency 
towards steadiness and regularity of movement — and the more 
rapid is the advance in wealth, and power. The more they recede 



58 



LETTERS TO THE 



from each other, the more does society tend to take the form of 
an inverted pyramid, the less is the regularity of movement, the 
greater is the tendency towards barbarism, and the more rapid is 
the decline in wealth and power. With us, as you have seen, those 
prices do recede — more cotton and more flour being, as a rule, 
required to pay for any given quantity of iron, copper, tin, or 
lead — the most essential of the commodities required for advance 
in civilization — than was needed, for that purpose, half a cen- 
tury since. 

The closer that approximation, the greater is everywhere the 
tendency to increase in the productiveness of the soil — with 
growing power of association and combination. The more re- 
mote they are, the greater is the tendency towards exhaustion of 
the soil, with declining power of combination. Throughout the 
Union, that power is declining ; and thus are we presented with 
another of the phenomena which, everywhere else, have attended 
declining civilization. 

The more the soil becomes enriched, the greater is its power 
of attraction, the more rapid is the growth of commerce, and the 
more civilizing are the tendencies of the time. The more it is 
impoverished, the greater is its repulsive power, the slower be-, 
comes the movement of society, and the more rapid is the decline 
of civilization. With us, Mr. President, as you have seen, the 
attractive power of the soil diminishes, and men are almost every- 
where flying from each other, as if from pestilence — the enormous 
emigrations of the barbarous ages of Europe being here repro- 
duced, and affording conclusive evidence of decline in wealth, 
strength, and power. What are the lesser phenomena by which 
decay is manifested, and how they influence the various portions 
of society, we may now inquire. 

At the return of peace in 1815, land was high in price — a 
market having been already made at home, for the most important 
of its products. Protection being discontinued, that market dis- 
appeared, and the result was ' seen, six years later, in the almost 
universal ruin of the farmers — judgments being everywhere en- 
tered up — mortgages being foreclosed — sheriffs' sales abound- 
ing to such an extent as, at length, to force the people of the 
agricultural States to the adoption of laws for staying the execu- 
tion of the judgments of their courts — and land falling to a fourth 
of the price at which it had sold, but seven years before. The 
sales of public land, and the revenue therefrom, had trebled in 
the period from 1814 to 1818-19 — thus increasing the number 
of farmers, at the moment when the market for their products was 
gradually disappearing — and thus preparing the way for that 
decline in the price of the products of the farm, whose steady 
progress is exhibited in the figures already, Mr. President, laid 
before you. 

By 1824, the land revenue had fallen to less than a third of the 



PRESIDENT OF THE UNITED STATES, 



59 



amount at which it had stood in 1819. Thenceforward — protec- 
tion having been re-established — it went gently up, until, in 1832 
and 1833, it averaged $3,295,000 ; or, almost precisely the amount 
it had so suddenly attained thirteen years before. In the mean 
time, the population had increased about two-thirds ; and so 
regular had been the increase in the home demand for food, that 
now, for the first time in the country's history, its price was 
wholly uninfluenced by the fall of foreign markets. From 1828 
to 1831, wheat, in England, had been high — averaging £3 4s. 3d. 
per quarter, or $1.72 per bushel. From that period, it fell regu- 
larly, until, four years later, it was but £1 19s. 4r/., or $1.05 per 
bushel ; and yet, the price of flour in the American ports remained 
entirely unaffected ; as is shown by the following figures, derived 
from a recent Treasury Report : — 

Average of 1828 to 1831 $5.84 

1832 $5.87 1834 $5.50 \ r _ 9 



The Compromise tariff having now, however, begun to operate, 
mills ceased to be built, and importations rapidly increased. The 
mechanic arts no longer affording an outlet for the growing popu- 
lation, emigration to the West grew rapidly, accompanied by 
enormous speculations in the public lands — the speculator always 
desiring to go in advance of the poor settler, and to profit at his 
expense. The land revenue rose from $4,000,000 to $14,000,000, 
and $24,000,000; after which, for four succeeding years, it ave- 
raged $5,000,000; and thus, in six years, was more land disposed 
of, than had been sold in the forty preceding ones. The conse- 
quences were such as might have been expected. While the new 
farms were being created, by help of labor diverted from the old 
ones, food was scarce and high ; but by the time they were ready 
to furnish supplies, their owners found their market had dis- 
appeared. Land again falling in price, mortgages were fore- 
closed ; and once again, were farmers, by tens of thousands, turned 
adrift upon the world, to recommence their labors as they might. 
We have here the second great stage of preparation, for the extra- 
ordinary fall in the price of food that has been exhibited. 

The land revenue now (1842) fell to little more than a single 
million, from which point, under the protective tariff of that year 
it rose gradually until, five years later, it stood again at $3,000,000. 
Soon after, the discovery of the treasures of California came in to 
make demand for manufactures, and to give activity to commerce. 
So long as that activity continued, the sales of public lands 
continued small, but now — the building of mills and furnaces 
having ceased — the revenue from that source, in the three years 
ending with 1856, had attained an average of nearly $10,000,000. 
If to this, be added, the sales of land granted to railroad com- 
panies, we obtain a total for those years of at least $5u i''K.,v,0U; 



1833 



5.50 




GO 



LETTERS TO THE 



or twice the amount of the twelve years from 1840 to 1852, 
Those sales are an index to the exhaustion of the soil, the dis- 
persion of the people, the decline of commerce, and the growth 
of the power of the trader ; and as those of 1818 were followed 
by the agricultural ruin of 1821, and those of 1836 by the ruin 
of 1841, so must those of 1854-56 be followed by similar effects, 
at a period that is now but little distant. As a rule, the highest 
prices have always been followed by the lowest ones — those of 
the free trade period of 1822 having followed those of the protec- 
tive one of 1816 — the ruinous prices of 1842 and 1843 having 
followed those of 183*7 and 1838 — and the exceedingly low one 
of 1852 having followed closely upon the elevated ones of 1841 
and 1848. With each successive crisis, too, the price established 
at its close, has been lower than that of previous periods. As yet, 
1852 occupies the lowest place; but the day is fast approaching, 
Mr. President, when, should Heaven smile upon the labors of our 
farmers, they will look with regret, even to the low prices of the 
years from 1850 to 1852. The more they exhaust the soil, the 
greater will be the -tendency towards decline of price. 

Instability and irregularity being the essential characteristics 
of barbarism, there can be no real agriculture where they are 
found. The farmer, more than any other member of the community, 
requires stability — his investments being generally made a year, 
or more, in advance. The trader buys flour one day, and sells it 
on the next ; but the farmer needs to determine in the autumn, 
in what manner he will appropriate his land, for the year to come. 
The price of wheat falling and that of tobacco rising, he can 
make no change ; but the trader can — selling the one at the first 
appearance of a downward movement, and buying the other at 
the first appearance of an upward one. The skilful trader desires 
change, and the more frequent its recurrence, the more numerous 
are his chances for accumulating fortune ; but instability is ruinous 
to the farmer and the planter. The objects of the farmer and 
trader are, thus, widely different ; and yet the former appears most 
generally before the world as the advocate of his own subjection 
to the dominion of trade, and as the opponent of the policy that 
is based upon the idea of the extension of domestic commerce, and 
consequent emancipation of his land from the oppressive tax of 
transportation. Hence it is, that we meet with those conclusive 
evidences of declining civilization which are, in one part of the 
Union, supplied by the growing belief in the divine origin of 
slavery, and in the necessity for its continuance ; and in the other, 
by the facts, that in the older States, property in land becomes 
more consolidated ; that in all of them, the poor rent-paying 
tenant is taking the place of the small proprietor ; that, almost 
everywhere, exhaustion of the soil is proceeding with accelerated 
rapidity ; and that men are, everywhere, more and more com- 
pelled to relinquish the advantages of that combination with their 



PRESIDENT OF THK UNITED STATES. 



61 



fellow-men, to which, alone, they can look for the power to call 
the great forces of nature to their aid. 

The coal-miner, the smelter of ores, the cotton and woollen 
manufacturer, and all others engaged in the work of production, 
are, Mr. President, like the farmer in the fact that they need 
stability and regularity — giving a steady circulation of labor and 
its products, and increasing their ability to add to the machinery 
required for their operations. That having been obtained, they 
are enabled, in each successive year, to profit by the experience 
of the past, and to give to the farmer a constantly increasing 
quantity of cloth, in exchange for a constantly diminishing quan- 
tity of food and wool — the prices of the two tending steadily and 
regularly to approach each other. That stability, and that regu- 
larity of circulation, have, however, been to the people of the 
United States, things entirely unknown. At times, as in the two 
periods ending in 1835 and 1847, it has been approached, but, 
in every case, it has proved but a mere lure, for inducing men 
of skill and enterprise to waste their fortunes, and their time, in 
the effort to advance the interests of the community, with ruin to 
themselves. 

From 1810 to 1815, mills and furnaces were built, but with 
the return of peace, their owners — embracing large and small 
capitalists, working-men and others, the most useful portions of 
the community — were everywhere ruined, and the people who 
had been employed were turned adrift, to seek in the West the sup- 
port they could no longer find at home. Land sales then, as we 
have seen, became large, and, next, the farmer suffered as the 
manufacturer had done before. From 1828 to 1834, such esta- 
blishments were again erected, and the metallic treasures of the 
earth were being everywhere developed ; but,, as before, the pro- 
tective system was again abandoned, with ruin to the manufac- 
turer, accompanied by enormous sales of public land, and fol- 
lowed by ruin to the farmer. From 1842 to 1847, mills and 
furnaces were again constructed ; and then, from 1848 to 1850, 
they were again closed ; the effect being seen,, in 1850-52, in 
the fall of flour to a price lower than had ever before been known. 
The perfect harmony of all true interests, and the absolute neces- 
sity for protection to the farmer, in his efforts to bring the artisan 
to his side, and thus relieve himself from the heavy taxation to 
which he is now subjected, are here exhibited in the strongest 
light. No one, who studies the regular sequence of these facts, 
can hesitate as to full belief in that portion of the doctrine of 
The Wealth of Nations, which teaches, that the English system, 
based as it is upon the idea of cheapening all the raw materials 
of manufacture, " is a manifest violation of the most sacred rights 
of mankind. " 

In the last ten years, few mills or furnaces have been erected — 
the value of those in existence having been, in general, so far 



\ 



62 



LETTERS TO THE 



below the cost of production, as to have afforded no reason for 
making any addition to their number. 

The history of industry in no civilized country of the world 
presents such a scene of destruction as is found in the manu- 
facturing, mining, and railroad operations of the Union. Of 
all the persons concerned in making those great improvements 
required for diminishing the distance between the consumer and 
the producer — for enabling the producers of wool, flax, and food 
readily to exchange for cloth and iron — and for reducing the 
prices of manufactured commodities, while raising those of the 
raw products of the earth — a large majority have been ruined; 
and the result is seen in the facts, that the various metals are 
rising in price, as compared with flour and cotton — that our 
farmers, as a rule, are poor — that, with each successive year, the 
land is being more rapidly exhausted — and ; that the country 
exhibits so many other evidences of declining civilization. 

Careful study of these facts, Mr. President, will enable you, 
readily, to understand the causes of the demoralization now 
making such rapid progress. The policy of the country be- 
ing wholly adverse to the growth of manufactures, agriculture 
remains, and necessarily, in its rudest state — offering no attrac- 
tion for men of any cultivation. Seeking a pursuit, our young 
men shrink from one that involves so large an amount of labor, 
and is so badly paid. Looking, next, to the production of iron, 
or the manufacture of cloth, they see that most of the men who 
have been so engaged, have reaped but ruin as the result. Thus 
limited in their choice of employments, they find themselves driven 
to becoming clerks, traders, lawyers, or doctors ; and the conse- 
quences are seen in the fact, that we have five times more traders, 
lawyers, and doctors, than can obtain a living by any honest 
means. All, however, must live — honestly if they can, but dis- 
honestly if they must ; and hence it is, that the race of sharpers 
and blacklegs, speculators and swindlers, slave traders and fili- 
busters, counterfeiters and peculators, increases with such rapidity. 
It is safe, Mr. President, to say, that with the present policy of the 
central government is inseparably connected, a greater develop- 
ment of the merely appropriative powers, and a greater tendency 
towards decline in the security of person and property, than can 
be found in any country of the world, claiming to be held as 
civilized. 

This is a sad picture, Mr. President, but that it is a true one, 
you have abundant evidence in the proceedings of the world 
around you. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, January lWi, 1858. 



PRESIDENT OF THE UNITED STATES. 



63 



LETTER TWELFTH. 

11 Thirty-one independent States, enjoying a thousand advan- 
tages, are mutually engaged in a free trade with each other. 
That, is the free trade we want!" — Such, Mr. President, was 
the most accurate view of the great and pressing "want "of 
your countrymen, presented by yourself, but a few years since. 
Seeing most clearly, as you then did, the enormous amount of 
taxes paid by our farmers, in the form of transportation, commis- 
sions, and other charges — the necessary consequence of depend- 
ence upon distant markets — it was to you most obvious, that 
what they really needed was, commerce among the States — com- 
merce within the States — commerce in towns and villages — that 
commerce which, in other countries, enables men to exchange 
with each other, ideas, services, and products, with little charge for 
intermediate agency ; and thus to emancipate themselves, almost 
entirely, from the grinding taxes of trade and transportation. 

What, however, is it, that has given to those thirty-one States 
the power to maintain any commerce whatsoever ? Is it not, 
Mr. President, a consequence of diversity in their modes of 
employment, resulting from the fact, that, while one portion of 
the country is fitted for raising cotton or sugar, others are better 
suited to raising wheat, rice, corn, barley, or grass — that while 
the soil of one is underlaid with coal, that of others is underlaid 
with lead or copper, marl or lime ? That such is the case, is 
beyond all doubt. That without difference there can be no 
commerce, is shown by the facts, that the cotton planter of Caro- 
lina maintains no commerce with his fellow planter of Georgia, 
and that the farmer of Illinois makes no exchanges with his 
fellow farmer of Indiana. 

What, however, is the actual amount of commerce among the 
States? How much does Kentucky exchange with Missouri? 
What is the annual value of the commerce of Ohio with Indiana — 
of Virginia with Kentucky ? Scarcely more, as I imagine, than 
that of a single day's labor of their respective populations; and, 
perhaps, not even half so much. — Why, Mr. President, is this 
the case ? Is it not a necessary consequence of the absence of 
that diversity of employments within the States, which we see, 
everywhere, to be so indispensable to the maintenance of com- 
merce ? Assuredly it is. Ohio and Indiana have little more 
than one pursuit — that of scratching out the soil, and exporting 
it in the form of food. Virginia and Kentucky have the same 
pursuits — selling their soil in the forms of tobacco and of corn. 
Carolina and Alabama have the same pursuits ; and so it is 
throughout by far the larger portion of the Union — millions of 



64 



LETTERS TO THE 



people being employed in one part of it, in robbing the earth of 
the constituents of cotton, while in others, other millions are em- 
ployed in plundering the great treasury of nature, of the constitu- 
ents of wheat and rice, corn and tobacco, and thus destroying, 
for themselves and their successors, the power to maintain commerce. 

The commerce of State with State is, thus, Mr. President, but 
small ; and the reason why it is so, is, that the commerce of man 
with his fellow man, within the States, as a general rule, is so 
exceedingly diminutive. Were the people of Illinois enabled to 
develope their almost boundless deposits of coal and iron ore, 
and thus to call to their aid the wonderful power of steam, the 
internal commerce of the State would grow rapidly — making a 
market at home for the food produced, and enabling its producer 
to become a large consumer of cotton. Cotton mills then grow- 
ing up, bales of cotton wool would travel up the Mississippi, to 
be given in exchange for the iron required for the roads of 
Arkansas and Alabama, and for the machinery demanded for the 
construction of cotton and sugar mills, in Texas and Louisiana. 

That, Mr. President, as you so well have said, is the sort of 
free trade that we really require. It grew with great rapidity, in 
the period ending in 1816 — that period in which the domestic 
market absorbed so large a proportion of cotton that was pro- 
duced. It died away, in the years that followed, from 1817 
to 1824, when mills and furnaces were closed, and mechanics 
were, everywhere throughout the country, suffering for want of 
food. It grew again, in the period from 1824 to 1834, when 
the product of iron rose to 200,000 tons, and thus enabled the 
farmers of the country to double their demands for the products 
of the plantation. It declined from 1834 to 1842 — the period, 
during which, the domestic production of iron, and the domestic 
consumption of cotton, remained almost unchanged in quantity, 
notwithstanding an addition of 25 per cent, to our population — 
It grew again, from 1842 to 1848 — the domestic production 
of iron having in that brief period almost quadrupled, while the 
domestic demand for cotton doubled. It has now declined — 
the production of iron being less than it was five years since, and 
the demand for cotton being, at this moment, not greater, prob- 
ably, than it was in 1842, when our numbers were little more 
than half as great as they are at the present hour. 

We have now, probably, thirty millions of people, occupying 
the thirty-one States, of which, Mr. President, you spoke ; and 
yet, among them all, there is, at the present time, almost literally, 
no commerce. — The planter stores his cotton — waiting for better 
prices. For the same reason, the farmer houses his wheat and 
his corn. Neither of them, therefore, is able to purchase cloth 
or iron. The iron master, as a consequence, is forced to close 
his furnace, and the maker of cloth closes his mill. Wages 
ceasing to be paid, the owner of houses receives no rent. Houses 



PRESIDENT OF THE UNITED STATES. 



65 



censing to be built, the unemployed mason and carpenter take 
their places by the side of the already discharged workers in wool 
and cotton, in coal and iron. Commerce thus perishes ; and this 
it does, because our rulers, Mr. President, have been led to believ6 
that national wealth and power were to be obtained, as the results 
of measures directly the reverse of those so plainly indicated by 
yourself, at the opening of the Central railroad, but a few years 
since. You, then, most clearly saw, that what we needed was, the 
establishment of that entire freedom of commerce among ourselves, 
that would enable each and every man to find, at the instant, a 
purchaser for all his powers of body, or of mind ; and that, so far 
as the system commonly called " free trade," tended to prevent 
the growth of that commerce, it was precisely the sort of free- 
dom that we did not want. — A disciple in the school of Adam 
Smith, you could not fail to agree with him in his estimate of the 
vast advantage to be derived by the farmer from condensing 
thousands of pounds of food and wool into a piece of cloth, and 
thus diminishing the tax of transportation — every step in that 
direction tending towards diversifying employments, and thus ex- 
tending domestic commerce, while greatly facilitating intercourse 
with the distant nations of the world. 

The greater the number of differences among men — the 
greater the diversity of demands for their various faculties — the 
greater, Mr. President, is the power to maintain commerce among 
themselves. The greater the domestic commerce, the greater is, 
always, the power to maintain commerce with distaut people, and 
the greater the tendency towards the growth of wealth and power. 
For proof of this, we need only look to France — that country of 
Europe whose policy has most consistently been directed towards 
the diversification of employments, and the extension of internal 
commerce. Seeking, however, further evidence of this, you may 
look to Belgium, Sweden, Denmark, and Northern Germany, 
in all of which you will find a rapid extension of intercourse 
with the world, as a necessary consequence of increasing power 
for the maintenance of that domestic commerce, so well described 
by you, Mr. President, as the sort of "free trade" that we really 
need among ourselves. Looking, next, homeward, you at once 
are struck with the great power of Massachusetts to maintain 
commerce with New York and Pennsylvania, wmen compared 
with the commercial relations of Virginia with Kentucky, or of 
Carolina with Tennessee. 

Loot, however, where you may, you will nowhere find facts 
more fully confirmatory of the accuracy of your views, than in the 
commercial history of England, now the great apostle of the sort 
of free trade that we do not require. A century since, she was 
busily engaged in robbing her soil, and exporting it in the form 
of raw materials, to be sold, and at the lowest prices, to the 
manufacturing communities of the lower Rhine. The more the 
5 



66 



LETTERS TO THE 



soil became impoverished, and the less its yield, the lower, as, 
Mr. President, you have seen, became the prices ; and hence arose 
the boast among the German cities, that they bought from the 
Englishman the skin of the fox for a groat, and then re-sold him 
the tail for a shilling. — Ridiculous as this may now seem, it is 
precisely what we ourselves are doing — selling flour by the ton, 
and then buying it back again, in the form of cloth and iron, by 
the pound — selling cotton by the bale, and then buying it back 
by the pennyweight — and exhausting the soil in the effort, in this 
manner, to obtain the little cloth and iron, we are able to consume. 
Even then, however, a change of the English system was near at 
hand. Efficient protection — developing the cloth and iron manu- 
factures — soon gave the English farmer a market at home, and 
tlius created domestic commerce, the only solid foundation for a 
great external one. Raw materials rose in price, while machines 
and cloths were cheapened ; and thus was furnished the most 
conclusive evidence, that the nation which would advance in wealth 
and power, must adopt a policy looking to the emancipation of the 
farmer from the tax of transportation, and to the approximation 
of the prices of his rude products, and those of the finished com- 
modities required for his use. 

Turning now homewards, Mr. President, we find abundant evi- 
dence of your perfect accuracy in looking to the extension of 
domestic commerce, as furnishing the only sure foundation for 
an extended intercourse with foreign countries, and as being, 
therefore, the sort of free trade that we really need. — From the 
date of the passage of the act of 1816, by which the axe was laid 
to the root of our then-rapidly-growing manufactures, the foreign 
trade steadily declined, until, in 1821, the value of our imports 
was less than half of what it had been six years before. Thence- 
forward, there was little change until the highly protective act of 
] 828 came fairly into operation — the average amount of our im- 
ports, from 1822 to 1830, having been but 80 millions — and the 
variations having been between 96 millions in one year and 70 in 
another. Under that tariff, domestic commerce grew with great 
rapidity — enabling our people promptly to sell their labor, and 
thus to become large customers to the people of other lands, as 
is shown by the following figures, representing the value of goods 
imported : — ' 

1830- 31 $103,000,000 

1831- 32 .' 101.000,000 

1832- 33 108,000,000 ' 

1833- 34 126,000,000 

Here, Mr. President, is a steady and regular growth — the last 
of these years being, by far the highest, and exceeding, by more 
than 50 per cent., the average of the eight years from 1822 to 
1830. In this period, not only did we contract no foreign debt, 
but we paid off the whole of that which previously had existed — 
the legacy of the war of independence. 



PRESIDENT OF THE UNITED STATES. 



67 



The Compromise tariff began now to exert its influence on the 
societary movement — stopping the building of mills and the open- 
ing of mines, and thus lessening the power to maintain domestic 
commerce. How it operated on that with foreign nations, is 
shown in the facts, that the imports of 1837 went up to 
$189,000,000, and those of 1838 down to 61 13,000,000 — those 
of 1839 up to $16-2,000,000, and those of 1840 down to 
$107,000,000 ; while those of 1842 were less than they had been 
ten years before. In this period, we ran in debt to foreigners, to 
the extent of hundreds of millions, and closed with a bankruptcy 
so universal, as to have embraced, individuals, banks, towns, cities, 
States, and the national treasury itself. 

That instability is the essential characteristic of the system 
called free trade — that one which, as you, Mr. President, have 
so clearly seen, we do not want — will be obvious on the most 
cursory examination of the facts presented by the two periods of 
that system, through which we have thus far passed. From more 
than $100,000,000, in 1817, our imports fell, in 1821, to 
$62,000,000. In 1825, they rose to $96,000,000, and then, two 
years later, they were but $79,000,000. From 1829 to 1834, 
they grew steadily and regularly, but, no sooner had protection 
been abandoned, than instability, with its attendant speculation, 
re-appeared — the imports of 1836 having been greater by 45 per 
cent., than those of 1834, and those of 1840 little more than half 
as great as those of 1836. — Careful study of these facts, Mr. Pre- 
sident, can scarcely fail to satisfy you, that the cause of all the 
difficulties you have so well described, is to be found in the action 
of the central government ; and that, it is in that direction, and 
not to modification of the local action, we must look for remedy. 

Once again, in 1842, protection was restored ; and once again, 
do we find a steady and regular growth in the power to maintain 
intercourse with the outer world, consequent upon the growth of 
domestic commerce, as is shown in the following figures : — 



Here, Mr. President, we find a constant increase of power to go 
to foreign markets, accompanied by a constant decrease in the 
necessity for resorting to them — the domestic production of cot- 
ton and woollen goods having doubled in this brief period, while 
the domestic production of iron had more than trebled. 

Ten years having elapsed since the tariff of 1846 became 
fairly operative, we have now another opportunity for contrasting 
the operation of the free trade that we do not want, with that 
which we so much require. Doing so, we find the same instability 
by which were characterised the periods which preceded the act 
of 1824 — that of 1828, and that of 1842 — and on a larger scale. 



1843- 44 

1844- 45 

1845- 46 
1816-47 



8108.000,000 
117,000.000 
121.000,000 
146,000,000 



68 



LETTERS TO THE 



In 1849-50, our imports were $178,000,000. In 1854, they were 
$304,000,000. In 1855, $260,000,000. In 1857, $360,000,000— 
and now, they are about to fall to $180,000,000, if not, even, to a 
figure greatly lower. 

That this must be so, will be obvious to those who study the 
history of the past few years, and contrast the hundreds of mil- 
lions of debt we have created — making an annual demand for 
$30,000,000 for the payment of interest — with the entire discredit 
into which we have now so justly fallen. That it must be so, will 
be clear to those who look to the facts, that, prior to the opening 
of the Crimean war, the price of flour had fallen to a lower point 
than had ever before been known — that since that period, we 
have driven millions of men to the creation of farms, that are now 
about to deluge us with food — that the number of persons en- 
gaged in any department of manufacture, is less now, than it was 
five years since — that the power to purchase food is as steadily 
declining, as the power to furnish it increases — and that, with 
favorable seasons, its future price must, certainly, be lower than 
has ever yet been known. That it must be so, will be apparent 
to those who look to the facts, that the cotton crop, in 1849, ex- 
ceeded 2,800,000 bales — that, since that time, the population of 
the cotton-growing States has been almost a third increased — 
that the new lands are now becoming productive — that the aug- 
mentation of the crop is likely to be as great as it was, after 
the last bankruptcy, in 1841, when the average was, suddenly, 
forty per cent, increased — that it is likely soon to reach 
4,000,000 bales — that the domestic market will now be 250,000 
bales less than it has been in the past two years — that the foreign 
market will, therefore, be required to absorb at least a million of 
extra bales — that the farmers of Europe will find a reduction in 
their power to purchase clothing, consequent upon the reduction 
in the prices of our food — that the demand tends thus to decline 
as the supply tends to increase — and, that all past experience 
goes to show, that after each successive crisis, the permanent 
average of prices has fallen below that which had been fixed by 
its predecessor. — The seasons may prove unfavorable, and crops 
may prove small, but should Providence favor the planter with 
liberal returns, he is likely to be more nearly ruined, than in any 
period he yet has seen. Such being the facts in reference to the 
future of our great staples, it is fair, Mr. President, to assume, 
that the quantity of foreign merchandise we shall now import 
will scarcely go beyond, even if it equal, $180,000,000. 

How the facts above described have tended to affect the cur- 
rency, I propose to show in another letter, remaining, meanwhile, 
Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, January 19th, 1858. 



PRESIDENT OF THE UNITED STATES. 



69 



LETTER THIRTEENTH. 

The single commodity, Mr. President, that is of universal 
request, is Money. Go where we may, we meet persons seeking 
commodities required for the satisfaction of their wants — yet 
widely differing in their demands. One needs corn ; a second, 
clothing; a third, books, newspapers, horses, or ships. Many 
desire food, yet while one would have fish, another rejects the fish 
and seeks for meat. Offer clothing to him who sought for ships, 
a^d he would prove to have been supplied. Place before the 
seeker after silks, the finest lot of cattle, and he will not purchase. 
The woman of fashion rejects the pantaloons ; while the porter 
regards her slipper as wholly worthless. Of all these people, 
nevertheless, there would not be found a single one, unwilling to 
give labor, attention, skill, houses, bonds, lands, horses, or what- 
ever else might be within his reach, in exchange for money — pro- 
vided, only, that the quantity offered were deemed sufficient. 

Were a hundred ships to arrive at our several ports to-morrow, 
a single one of which was freighted with gold, she alone would 
find a place in the editorial columns of our journals — leaving 
wholly out of view the remaining ninety-nine, freighted with silks 
and teas, cloth and sugar. The news, too, would find a similar 
place in almost all the journals of the Union, and for the reason, 
that all their readers, the bears excepted, so much rejoice when 
money comes in, and so much regret when it goes abroad. Of 
all the materials of which the earth is composed, there are none 
so universally acceptable as gold and silver — none, in whose 
movements so large a portion of every community feels an 
interest. 

Why, Mr. President, is this the case ? Because of their having 
distinctive qualities that bring them into direct connection with 
the distinctive qualities of man — facilitating the growth of asso- 
ciation, and promoting the development of human powers. They 
are the indispensable instruments of society, or commerce. 

That they are so, would seem to be admitted by those journal- 
ists when giving to their movements so much publicity ; and yet, 
on turning to another column, you would probably find it there 
asserted, that all this anxiety in regard to money was evidence 
of ignorance — man's condition being improved, by parting with 
gold that he can neither eat, drink, nor wear, in exchange for 
sugar that he can eat, and cloth that he can wear. Such may be 
the case, says one reader, but, for my part, I prefer to see money 
come in, because when it does so, I can borrow at six per cent. ; 
whereas, when it is going out, I have to pay ten, twelve, or 
twenty. This is doubtless true, says another, but I prefer to see 



70 



LETTERS TO THE 



money arrive — being then able to sell my hats and shoes, and to 
pay the people who make them. It may be evidence of ignorance, 
says a third, but I always rejoice when money flows inwards, for 
then I can always sell my labor ; whereas, when it flows outwards, 
I am unemployed, and my wife and children suffer for want of 
food and clothing. Men's natural instincts look, thus, in one 
direction, while mock science points in another. The first, Mr. 
President, should be right, because they are given of God. The 
last may he wrong — being one among the weak inventions of 
man. Which is right, we may now inquire. 

Of all the commodities in use among men, there is none the 
control of which gives to its possessor so large an amount of 
power, as that of money. Sovereigns in the East heap up gold 
as provision against future accidents ; and finance ministers rf 
the West, rejoice when their accounts enable them to exhibit a 
full supply of the precious metals. When it is otherwise, the 
highest dignitaries are seen paying obsequious court to the Roth- 
schild and the Baring, controllers of the money market. So, too, 
when railroads are to be made, or steamers to be built. Farmers 
and contractors, land-owners and stockholders, then go, cap in 
hand, to the Croesuses of Paris and London, anxious to obtain a 
hearing — and desiring to propitiate the man of power by making 
whatsoever sacrifice may seem to be required. 

Of all the questions, Mr. President, that are now before us, 
there is none that so much occupies the public mind, as that of 
the establishment of the currency on such a basis, as will secure 
us against future repetition of the "extravagant expansions" and 
''ruinous contractions, " that have, in each and every case, attended 
the departure of the central government from the course of policy 
you so much admire — the course which looks to giving us that 
freedom of domestic intercourse, from which we have been so much 
debarred. How great, in your opinion, is the importance of this 
question, is clearly indicated, as well by the fulness with which 
you have treated it in your Message, as by your suggestions in 
reference to the remedies that, as you seem to think, may be 
required for the correction of the evils under which we suffer. 

Prior to the formation of the Constitution, the power to 
create banks, and to define the powers of such institutions, 
rested, unquestionably, with the States ; and as, when they ac- 
cepted that -instrument, they certainly retained all the powers not 
expressly parted with, not a doubt can now exist of their having, 
in the time that has since elapsed, acted in full accordance with 
both its letter and its spirit. Nevertheless, so great in your 
opinion, Mr. President, are the evils now resulting from the exer- 
cise of the power thus retained, that, "after long and much reflec- 
tion," you have arrived at the conclusion, that, "if experience 
shall prove it to be impossible to enjoy the facilities which well- 
regulated banks might afford, without at the same time suffering 



PRESIDENT OF THE UNITED STATES. 



71 



the calamities which the excesses of the banks have hitherto 
inflicted upon the country, it would then be far the lesser evil to 
deprive them altogether of the power to issue a paper currency, 
and confine them to the functions of banks of deposit and 
discount." The measures thus suggested involving, of course, 
the entire annihilation of the rights of the States, in reference to 
this important question — rights, that, during half a century from 
the peace of 1*783, had remained entirely unquestioned — it is no 
matter for surprise, that it should have required the most serious 
reflection, before you should have satisfied yourself of the necessity 
for suggesting a remedy so entirely opposed to the views you pre- 
viously had entertained ; and so much opposed, too, to all the 
ideas of the founders of the Constitution, in reference to the beau- 
tiful system of local self-government they had found established. 
Where, however, Mr. President, exists the power to deprive the 
States of the exercise of rights with which they have never parted ? 
In the central government? Assuredly not — that government 
having no power not expressly granted to it by the Constitution. 
It is asserted, nevertheless, that the Supreme Court stands now 
ready to reverse all the action of the past seventy years — at this 
late period deciding, that Washington and Adams, Hamilton and 
Franklin, Jefferson and Madison, had been altogether wrong in 
their estimate of the powers of the States — that, according to the 
true intent and meaning of the Constitution, the regulation of all 
the banks of the Union belonged to the central authorities — and 
that, it needs but the passage of an act of Congress, for the 
reduction of all the banks of the Union to a condition nearly akin 
to that of saving-funds, authorised to receive the deposits of indi- 
viduals, and to lend them out ; but deprived of all power in any 
other manner to aid the operations of the communities in which 
they are placed. 

It is but the first step, Mr. President, that is difficult. That 
once taken, each successive one becomes more easy — the course 
of man, in whatever direction, whether towards barbarism or 
civilization, centralization or localization, being one of constant 
acceleration. The removal of the deposits, in defiance of law, by 
General Jackson, was a great step towards centralization ; and 
yet, it was but trivial, compared with that you have now sug- 
gested — leading, as it inevitably does, to the entire subjection 
of the currency to the central government. Look almost where 
we may, Mr. President, throughout the European history of the 
middle ages, we see the exclusive control of the indispensable 
instrument of society, to have been regarded as furnishing the 
most important of all the machinery of taxation. — So was it, 
with our Continental money — the amount of taxes collected by 
its aid, having been immeasurably greater than could have been 
collected as a consequence of any direct appeal to the people. 
So has it been, too, throughout this century, with the Austrian 



72 



LETTERS TO THE 



government — paper money having been issued until it had be- 
come greatly depreciated, and then having been replaced by other 
paper money, whose value was, as the taxpayers were assured, to 
be maintained. That, in turn, becoming depreciated, it was called 
in, to be again and again replaced, until nearly the whole original 
amount had disappeared. — To relieve themselves from such 
oppression it was, that the people of European cities established 
banks ; and it was by means of those institutions, that the con- 
trol of the currency was finally wrested from the various sovereigns, 
and vested in their subjects' hands — leaving to the government 
no power, but that of coinage. 

That, Mr. President, having been one of the most important 
steps in the road towards the improvement of man's condition, 
the money-shop, or bank, has obtained, in all communities' an 
importance increasing in the direct ratio of their growth in civili- 
zation, and in freedom. Among ourselves, alone, are they the 
subjects of unceasing denunciation and persecution. Having be- 
come " identified with the habits of our people, " they cannot, as 
you say, be "suddenly abolished"; but their further existence 
can, as you add, be tolerated, only on the condition of their 
limiting themselves £< to their appropriate sphere" — abstaining 
from " administering to the spirit of wild and reckless speculation, 
by extravagant loans and issues," and thus rendering themselves 
of " advantage to the public." 

It is quite impossible, Mr. President, to close our eyes to the 
fact, that all our tendencies, for the last few years, have been 
towards the absorption of all power by the central authorities ; 
but, great as have been the previous steps in that direction, the 
one now proposed goes so far beyond them all, as to leave them 
out of sight. Let the measures thus suggested be carried into 
effect — let the control of the currency pass into the hands of 
Federal agents — and all the expansions and contractions you 
have so well described, will be far exceeded. "Deplorable," as 
you truly say, is " our present financial condition." The cup of 
misery will, however, then be full — the pages of history furnishing 
abundant evidence, that of all the tyrannies yet known to man, 
that of a centralized democracy is the most oppressive. ■ 

That there is great error somewhere, there is no doubt. Does 
it result from the existence of banks ? Scarcely, as it would 
seem — their growth, throughout Europe, having been in the direct 
ratio of the advance in civilization. That of France, with its 
numerous branches, is the creation of the present century. Those 
of Germany tend rapidly to increase in number. Turkey makes 
no banks. — Does it lie with bank notes ? It would seem not — 
Great Britain, whose advance in civilization was so rapid, having 
been, at all times, the leader in the use of a paper circulation. 
The use of such notes steadily increases in France and Belgium ; 
and yet, of all the countries of Europe, there are none that have 



PRESIDENT OF THE UNITED STATES. 



73 



passed so nearly uninjured, through the present crisis. Their use 
is greater in New England than in Illinois ; and yet, the changes 
in the value of property have been far greater in the latter, than 
in the former. 

Of all the countries of the world, claiming to rank among those 
most civilized, the only two whose governments are now engaged 
in a crusade against bank notes, are the United States and Eng- 
land — the two, whose policy is wholly directed to the extension 
of foreign trade ; the two, that now control the chief gold deposits 
of the world ; the two, which regard an increase in the necessity 
for ships and wagons as evidence of growing wealth and power ; 
the two, whose every step is towards increase of centralization ; 
the two, whose policy tends towards diminution in the prices of 
raw materials, and the subjection of the farmer to the trader; 
the two, whose crises are most frequent and most severe ; and 
the two, that are now most nearly bankrupt. 

The phenomena thus presented for consideration, are, certainly, 
evidences of declining civilization. Such being the case, further 
progress in that direction must tend towards barbarism. What, 
however, is the real route towards civilization ? That, Mr. Presi- 
dent, is a question that can be answered, only after a brief inquiry 
into the effects resulting from the possession of money, and into 
the circumstances which influence its supply, which it is proposed 
now to make. — Should that result in satisfying you, that the 
cause of all our difficulties is to be found in the failure of the 
central government to carry into effect your views in regard to 
that commerce which we really want, and not in the local action ; 
and should you, thereby, be relieved of all necessity for departing 
from the construction given to the Constitution by your most 
distinguished predecessors, it will, I am well assured, be cause of 
unmixed satisfaction. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, January 22d, 1858. 



74 



LETTERS TO THE 



LETTER FOURTEENTH. 

"Money — being a mere commodity — is subject to the same 
laws that govern wool and cloth, coal and iron. Why, then, 
should our legislators trouble themselves about its movements, 
any more than about those of turnips, or potatoes ? If we need 
it, and are ready to pay for it, it will come. If we do not need 
it, or have nothing with which to pay for it, it will not come ; 
and we shall, perhaps, be better off without than with it." Such, 
Mr. President, is the sort of argument that, year after year, is 
used by gentlemen who hold to the idea that countries are to be 
enriched by increasing trade with distant people, and sacrificing 
that commerce among ourselves which, as you have so clearly 
seen, is the sort of "free trade" we really need; by financiers 
who tell us, that gold being one of our products, its export 
is as natural and necessary as is that of cotton, and who look, 
with perfect calmness, at an outward current of the precious 
metals greatly exceeding the inward one ; by Secretaries of the 
Treasury, who close their eyes to the clouds that are gathering 
round, and then, when overtaken by the storm, gravely tell the 
suffering millions, that "it was impossible to foresee the present 
revulsion in trade and commerce"; and generally, by all that 
class of middlemen, now so rapidly increasing among ourselves, 
which lives by preying upon the useful portions of society, and 
seeks, as far as possible, to widen the distance between the men 
who labor to produce, and depend upon the sale of their labor 
and its products, for the ability to feed their wives, their children, 
and themselves. 

Such persons, Mr. President, have, as it would seem, yet to 
learn, that, in addition to the qualities common to themselves and 
other commodities, the precious metals possess that other most 
important one, of being the great instruments, provided by the 
Creator, for facilitating those exchanges of society which consti- 
tute that commerce between man and his fellow man, by the 
growth of which we are furnished with the highest of all the 
evidences of advancing civilization. By their help it is, that the 
farmer, the miller, the clothier, and all other members of 
society, are enabled to purchase for a single cent, a portion of 
the labors of thousands, and tens of thousands, of men employed 
in making railroads, engines, and cars, and transporting upon 
them, annually, hundreds of millions of letters ; or, for another 
cent, their share of the labor of the hundreds, if not thousands, of 
men who have contributed to the production of a penny news- 
paper. The mass of small coin is thus a saving fund for labor, 
because it facilitates association and combination — giving utility 



PRESIDENT OF THE UNITED STATES. 



75 



to billions of millions of minutes that would be wasted, did not a 
demand exist for them at the moment the power to labor had been 
produced. Labor being the first price given for everything we 
value, and being the commodity that all can offer in exchange 
the progress of communities in wealth and influence, is in the 
direct ratio of the presence, or absence, of an instant demand for 
the forces, physical and mental, of each and every man in the 
community — resulting from the existence of a power on the part 
of each and every other man, to offer something valuable in 
exchange for it. It is the only commodity that perishes at the 
instant of production, and that, if not then put to use, is lost 
forever. 

We are all, Mr. President, momently producing labor-power, 
and daily taking in the fuel by whose consumption it is produced; 
and that fuel is wasted, unless its product be on the instant use- 
fully employed. The most delicate fruits, or flowers, may be kept 
for hours or days ; but the force resulting from the consumption 
of food, cannot be kept, even for a second. That the instaut 
power of profitable consumption may be coincident with the in- 
stant production of this universal commodity, there must be inces- 
sant combination, followed by incessant division and subdivision; 
and that, in turn, followed by as incessant recomposition. This 
is seen in the case above referred to, where miners, furnace-men, 
machine-makers, rag-gatherers, carters, bleachers, paper-makers, 
railroad and caual men, type-makers, compositors, pressmen, au- 
thors, editors, publishers, newsboys, and hosts of others, combine 
their efforts for the production in market of a heap of newspapers 
that has, at the instant of production, to be divided off into por- 
tions suited to the wants of hundreds of thousands of consumers. 
Each of these latter pays a single cent — then perhaps subdividing 
it among half a dozen others, so that the cost is perhaps no more 
than a cent per week ; and yet, each obtains his share of the labors 
of all the persons by whom it had been produced. 

Of all the phenomena of society, this process of division, sub- 
division, composition, and recomposition, is the most remarkable ; 
and yet, Mr. President — being a thing of such common occur- 
rence — it scarcely attracts the slightest notice. Were the news- 
paper above referred to, partitioned off into squares, each repre- 
senting its portion of the labor of one of the persons who had 
contributed to the work, it would be found to be resolved into six, 
eight, or perhaps even ten thousand pieces, of various sizes, small 
and great — the former representing the men who had mined and 
smelted the ores of which the types and presses had been com- 
posed, and the latter the men and boys by whom the distribution 
had been made. Numerous as are these little scraps of human 
effort, they are, nevertheless, all combined in every sheet, and 
every member of the community may — for the trivial sum of fifty 
cents per annum — enjoy the advantage of the information therein 



76 



LETTERS TO THE 



contained ; and as fully as he could do, had it been collected for 
himself alone. 

Improvements in the modes of transportation are advantageous 
to man, but the service thereby rendered, when compared with 
the cost, is very small. A ship worth $50,000 cannot effect 
exchanges between men at opposite sides of the Atlantic, to an 
extent exceeding five or six thousand tons per annum ; whereas, 
a furnace of similar cost will effect the transmutation of thirty 
thousand tons' weight of coal, ore, limestone, food, and clothing, 
into iron. Compared with either of these, however, the commerce 
effected by the help of $50,000 worth of little white pieces, repre- 
senting labor to the extent of three or five cents — labor which, 
by their help, is gathered up into a heap, and then divided and 
subdivided day after day throughout the year — and it will be 
found that the service rendered to society, in economizing force, 
by each dollar's worth of money, is greater than is rendered by 
hundreds, if not thousands, employed in manufactures, or tens of 
thousands in ships or railroads ; and yet there are able writers, 
Mr. President, who tell us, that money is so much " dead 
capital," — being "an important portion of the capital of a 
country that produces nothing for the country. " 

" Money, as money," says an eminent economist, "satisfies no 
want, answers no purpose. * * The difference between a 
country with money, and a country altogether without it, would," 
as he thinks, " be only one of convenience, like grinding by water 
instead of by hand." A ship, as a ship — a road, as a road — a 
cotton-mill, as a cotton-mill — in like manner, however, " satisfies 
no want, answers no purpose." They can be neither eaten, drunk, 
nor worn. All, however, are instruments for facilitating the work 
of association, and the growth of man in wealth and power is in 
the direct ratio of the facility of combination with his fellow-men. 
To what extent they do so, when compared with money, we may 
now inquire. To that end, let us suppose, Mr. President, that 
by some sudden convulsion of nature all the ships of the world 
were at once annihilated, and remark the effect produced. The 
ship-owners would lose heavily ; the sailors and the porters would 
have less employment ; and the price of wheat would temporarily 
fall ; while that of cloth would, for the moment, rise. At the 
close of a single year, by far the larger portion of the operations 
of society would be found moving precisely as they had done be- 
fore — commerce at home having taken the place of that abroad. 
Cotton and tropical fruits would be less easily obtained in Northern 
climes, and ice would be more scarce in Southern ones ; but, in 
regard to the chief exchanges of a society like our own, there 
would be no suspension, even for a single instant. So far, indeed, 
would it be to the contrary, that, in many countries, commerce 
would be far more active than it had been before — the loss of 
ships producing a demand for the opening of mines, for the con- 



PRESIDENT OF THE UNITED STATES. 



77 



struction of furnaces and engines, and for the building of mills, 
that would make a market for labor, mental and physical, such as 
had never before been known. 

Let us next suppose that the ships had been spared, and that 
all the gold and silver, coined and not coined, mined and not 
mined, had been annihilated, and study the effect that would be 
produced. The reader of newspapers — finding himself unable 
to pay for them in beef or butter, cloth or iron — would be com- 
pelled to dispense with his usual supply of intelligence, and the 
journal would be no longer printed. Omnibuses would cease to 
run, for want of sixpences ; and places of amusement would be 
closed, for want of shillings. Commerce among men would be at 
an end, except so far as it might be found possible to effect direct 
exchanges — food being given for labor, or wool for cloth. Such 
exchanges could, however, be few in number, and men, women, 
and children, would perish by millions, because of inability to 
obtain food and clothing in exchange for service. Cities whose 
population now counts by hundreds of thousands would, before 
the close of a single year, exhibit hundreds of blocks of unoccupied 
buildings, and the grass would grow in their streets. A substi- 
tute might, it is true, be found — men returning to the usages of 
those primitive times When wheat or iron, tobacco or copper, con- 
stituted the medium of exchange ; but under such circumstances, 
society, as at present constituted, could have no existence. A 
pound of iron would be required to pay for a Tribune or a Ledger, 
and hundreds of tons of any of the commodities above referred to, 
would be needed for the purchase of the weekly emissions of either. 
Tons of them would be needed to pay for the food consumed in 
a single eating-house, or the amusement furnished in a single the- 
atre ; and how the wheat, the iron, the corn, or the copper, could be 
fairly divided among the people who had contributed to the pro- 
duction of the journal, the food, or the amusement, would be a 
problem entirely incapable of solution. 

The precious metals, Mr. President, are to the social body what 
atmospheric air is to the physical one. Both supplying the ma- 
chinery of circulation, the resolution of the physical body into its 
elements when deprived of the one, is not more certain than is 
that of the social body when deprived of the other. In both 
these bodies, the amount of force is dependent upon the rapidity 
of circulation. That it ma^be rapid, there must be a full supply 
of the machinery by means of which it is to be effected ; and yet 
there are distinguished writers who mourn over the cost of main- 
taining the currency, as if it were altogether lost, while expatiating 
on the advantages of canals and railroads — not perceiving, appa- 
rently, that the money that can be carried in a bag, and that 
scarcely loses in weight with a service of half a dozen years, effects 
more exchanges than could be effected by a fleet of ships, many 
of which would, at the close of such a period of service, be rotting 



78 



•LETTERS TO THE 



on the shores on which they had been stranded, while the remain- 
der would already have lost half of their original value. 

Of all the labor-saving machinery in use, there is none that so 
much economizes human power, and so much facilitates combina- 
tion, as that known by the name of money. Wealth, or the power 
of man to command the services of nature, grows with every in- 
crease in the facility of combination — this latter growing with 
the growth of the ability to command the aid of the precious 
metals. Wealth, then, should increase most rapidly where that 
ability is most complete. 

Nevertheless, Mr. President, a study of our Treasury Reports 
of the last few years., would lead to the conclusion, that of all the 
machinery used by man, the ship was the most important, and 
the precious metals those that demanded least attention. Year 
after year, we are told of the wonderful growth of our tonnage ; 
and that, too, by gentlemen who seem never to advert to the fact, 
that a single ship would carry more tons of food and wool, in the 
shape of cloth, than it can carry of hundred-weights, in their original 
form. The great object to be accomplished being, that of in- 
creasing the quantity of shipping, it seems almost surprising that 
we should not, as yet, have had a proposition to require the cotton 
to be exported in the seed, and the corn in the husk, as a means 
of increasing the bulk of the things to be transported, anoT thus 
augmenting the demand for ships. — Our whole policy looking to 
the export of our products in their rudest states — and thus main- 
taining, at its highest, the tax of transportation — and that being 
the road towards barbarism — it affords no cause for surprise, 
that our people are so frequently compelled to resort to the use 
of worthless rags, as furnishing the only means of circulation that 
are within their reach. — What are the circumstances which tend 
to increase the supply of money, and how we may be enabled to 
carry into effect your idea of a real specie circulation, I propose 
to show in another letter, remaining meanwhile, Mr. President, 
Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, January 2bth, 1858. 



PRESIDENT OF THE UNITED STATES 



79 



LETTER FIFTEENTH. 

fOR more than twenty years, Mr. President, the Federal govern- 
ment has been engaged in an almost unceasing effort to secure to 
itself the control of that great instrument of association known as 
money — the professed object of all its labors in that direction, 
having been, the establishment of what has been termed " a hard 
money currency," to the entire exclusion of the paper circulation. 
The more it has labored, however, the less has been the stability 
of the currency — the periods distinguished by its most earnest 
efforts, having been those in which we have been most compelled 
to dispense with the use of the precious metals. But recently, 
money, as we were told, abounded — the channels of circulation 
having been, everywhere, filled with gold. Now, money of every 
kind, has almost altogether disappeared. "There is scarcely," 
says a recent traveller, "an Eastern bank-note to be found west 
of Cleveland, and any few dollars that may straggle this way 
are eagerly snapped up and sent East as a remittance. Gold is 
hidden, where it still lingers ; but very much not only of this, but 
of silver change, has been gathered up and sent East. Nebraska 
bank-notes, generally of dubious solvency, and uniformly convert- 
ible into specie, or Eastern paper, only at a ruinous discount, cor- 
poration shinplasters, and even individual shinplasters — none of 
them regarded as of any value far outside of the shadow of the 
tall ' Banks ' whence they are issued — are the accepted substitutes 
for money in most localities upon, and west of, the Mississippi. 
One of the Hutchinson brothers — who are now here, singing their 
way Eastward, from their new home in Minnesota — informed me, 
that he has been singing along four hundred miles, through Min- 
nesota and Iowa — taking grain for music, wherever cash was un- 
attainable, and has done very well by it. In one instance, a 
farmer drove up with eight bushels of corn in his sleigh, and his 
wife and six children seated thereon, saying, ' We have no money, 
but we all want to hear you, and corn is the best we can give you.' 
He accepted the corn very gladly, gave eight twenty-five-cent 
tickets in exchange for it, and sung it out. " 

Similar to this, Mr. President, was the state of things at the 
<;lose of the first trial of that "free trade" system, which, as you 
have so clearly seen, we do not, at present, require. So was it, 
too, in 1840-41, at the close of the second experiment — the only 
difference between it and its predecessor, having been, that the 
second crisis was far more fearful than the first. So is it, now, 
when we are fast approaching the close of the third experiment — 



80 



LETTERS TO THE 



each and every trial of the favorite policy of the central govern- 
ment, thus ending in the total disappearance of that " metallic 
basis" which it has so much desired to increase. 

Why is this so ? Because, Mr. President, your predecessors 
seem ever to have reflected, that, to be enabled to use any com- 
modity, or thing, we must first enable ourselves to get it ; and 
'that, a regular influx of the precious metals is quite as necessary 
to the maintenance of a hard money circulation, as is an influx 
of hides and cotton, to enable us to wear shoes and shirts. While 
asserting that money is a mere commodity, they do not admit that 
it is subject to the same laws which govern other commodities. 
Had our policy tended to produce so great an export of cotton 
as to compel our people to go in rags, no one would havft thought 
of charging the dealers in cotton with crime ; and yet, while pur- 
suing a policy that has, whenever tried, resulted in the disappear- 
ance of the precious metals, the fact of inability to produce them 
when demanded, has always been regarded as evidence of crimi- 
nality in the banks — warranting new additions to the pains and 
penalties provided by existing laws. Year after year, since the 
central government undertook the regulation of the currency, have 
they been increased ; and yet, despite the penalties, suspensions 
have occurred. They must continue to occur, until the central 
government shall come to appreciate the value of that very homely 
proverb, which teaches, that a boy cannot eat a cake and yet 
have it — thence learning, that a community cannot, more than 
an individual, pursue a course tending to promote the expulsion 
of the precious metals, and yet enjoy all the advantages attendant 
upon the maintenance of a specie circulation. 

All commodities, Mr. President, go from those places at which 
their utility is small, to those at which it is great. Therefore it is, 
that cotton, wool, and other raw materials, tend towards those 
places at which employments are most diversified — it being there 
that the products of the farm command the largest quantity of 
money. Gold and silver follow in the train of raw materials ; and 
for the reason, that where the farmer and the artisan are most 
enabled to combine, finished commodities are always cheapest. 
When Germany exported corn and wool, they were cheap, and 
she was required to export gold, to aid in paying for the cloth and 
paper she imported — the latter being very dear. Now she im- 
ports both wool and rags ; her farmers obtain high prices for their 
products, and are enriched ; and the gold comes to her, because 
cloth and paper are so cheap, that she sends them to the most dis- 
tant quarters of the world. So is it with France, Belgium, Swe- 
den, and Denmark — all of which are large importers of raw ma- 
terials, and of gold. In all those countries, raw materials rise in 
price ; and the greater the tendency to rise, the more rapidly must 
the current of the precious metals set in that direction. The 



PRESIDENT OF TIIE UNITED STATES. 



81 



country that desires to increase its supplies of gold, and thus 
lower the price of money, is, therefore, required to pursue the 
course of policy tending most to raise the prices of raw material, 
and lower those of manufactures. This, however, is directly the 
opposite of the policy advocated by the British school, which 
seeks, in the cneapening of all the raw material of manufactures, 
the means of advancing civilization. 

The proposition, Mr. President, above submitted for your con- 
sideration, is a very simple one, and yet, it is by its aid, if at all, 
that we shall arrive at a correct understanding of the cause of the 
difficulties under which we labor. The precious metals go from 
those countries in which employments are least diversified — from 
those, in which agriculture is least a science — from those, in which 
the yield of the land is least — from those, in which the land is 
becoming more and more exhausted — from those, in which the 
prices of the rude products of the earth are the lowest — from 
those, that are becoming more and more dependent upon trade — 
from those, in which domestic commerce declines — from those, 
in w r hich men are becoming less free — from all those, therefore, 
which decline in civilization. They go to those countries in which 
employments are becoming more diversified — to those, in which 
agriculture is becoming more and more a science — to those, in 
which the yield of the land is largest — to those, in which the 
powers of the land increase — to those, in which the farmer's pro- 
ducts command the highest prices — to those, which are becoming 
less dependent upon foreign trade — to those, in which there is a 
steady growth of the domestic commerce — to those, in which men 
are becoming less and less enslaved — to all those, therefore, in 
which, with each successive year, we are more and more presented 
with those phenomena which indicate advance in civilization. 

Of the machinery in use by man, it is the most serviceable 
that is last obtained — the cart following the camel and the mule — 
the wagon following the cart — and the railroad car, with its lo- 
comotive, following the wagon. Of all the instruments given by 
the Creator for man's use. money is the one which performs the 
largest amount of service, in proportion to its cost ; and therefore 
it is, that it is always the last to be obtained. Countries whose 
people are limited to the single pursuit of scratching the earth, 
can neither afford to buy nor keep it. Therefore it is, that the 
precious metals go from Portugal and Turkey, Brazil and Chili, 
California and Australia, in both of which latter, the price of 
money, as indicated by the rate of interest, is higher than in 
almost any other portion of the world. — Countries in which the 
pursuits of man are diversified — those, therefore, in which the 
prices of agricultural products tend to rise — can afford to buy 
and keep them ; and that such diversification is essential to the 
existence of the power so to do, is proved by every fact in the 
6 



82 



LETTERS TO THE 



history of English commerce in the last century, and in those of 
all the advancing countries of Europe in the present one. — That 
power grows with the growth of domestic commerce, the only 
sure foundation, as you, Mr. President, have so clearly seen, of a 
great foreign one. In its existence, therefore, may be found the 
most conclusive proof of advancing civilization. Which have 
been the periods at which it has existed among ourselves, and how 
it has affected the supplies of gold, we may now inquire. 

What was the commerce in the precious metals in the thirty years 
preceding the discovery of California, is shown by the following 
figures : — 

Excess exports. Excess imports. 

1821-1825 $12,, 500,000 

1826-1829 $4,000,000 

1830-1834 20,000,000 

1835-1838 (a period of extensive foreign loans) 34,000,000 

1839-1842 9,000,000 

1843-1847 (foreign debt largely reduced) . 39,000,000 

1848-1850 14,000,000 

In the closing years of the free trade system of 181*1, Mr. President, 
the average excess of specie export was about $2,500,000 a year. 
Adding to this a similar amount, only, for the annual consump- 
tion, we obtain an absolute diminution of five-and-twenty millions 
— the population having, meantime, increased about ten per cent. 
Under such circumstances, it is no matter of surprise that those 
years are conspicuous among the most calamitous ones in all our 
history. At Pittsburg, flour then sold at $1.25 per barrel ; wheat, 
throughout Ohio, would command but 20 cents a bushel ; while 
a ton of bar iron required a little short of eighty barrels of flour 
to pay for it. Such was the state of affairs that produced the 
tariff of 1824 — a very imperfect measure of protection, but one 
that, imperfect as it was, changed the course of the current, and 
caused a net import, in the four years that followed, of $4,000,000 
of the precious metals. In 1828, there was enacted the first 
tariff tending directly to the promotion of association throughout 
the country ; and its effects exhibit themselves in an excess import 
of the precious metals — averaging $4,000,000 a year — notwith- 
standing the discharge, in that period, of the whole of the national 
debt that had been held in Europe, amounting to many millions. 
Putting together the discharge of debt and the import of coin, the 
balance of trade in that period must have been in our favour to 
the extent of nearly $50,000,000.; or an average of about 
$10,000,000 a year. As a consequence, prosperity existed to an 
extent never before known — the power to purchase foreign com- 
modities having grown with such rapidity .as to render it neces- 
sary greatly to enlarge the free list ; and then it was, that coffee, 
tea, and many other raw commodities, were emancipated from 



PRESIDENT OF THE UNITED STATES. 



83 



the payment of any impost. Thus did efficient protection lead to 
a freedom of commerce, abroad and at home, such as had never 
before existed. 

The first few years of the compromise tariff of 1833, profited 
largely by the prosperity caused by the act of 1828, and the re- 
ductions under it, were then so small, that its operation was but 
slightly felt. In those years, too, there was contracted an enor- 
mous foreign debt — stopping the export of specie, and producing 
an excess .import averaging more than $8,000,000 a year. Pros- 
perity seemed to exist, but it was of the same description that has 
marked the last few years, during which the value of all property 
has depended entirely upon the power to contract debts abroad — 
thus placing the nation more completely under the control of its 
distant creditors. 

In the succeeding years, the compromise became more fully 
operative.* Furnaces and factories were closed, with constantly 
increasing necessity for looking abroad for the performance of all 
exchanges, and corresponding necessity for remitting money to 
pay the balance due on the purchases of previous years. Never- 
theless, the annual specie export averaged little more than 
$2,000,000; but if to this be added, a consumption of only 
$3,000,000 a year, we have a reduction of $20,000,000 ; the con- 
sequences of which were seen, in an almost total suspension of 
domestic commerce. The whole country was in a state of ruin. 
Laborers were everywhere out of employment, and being still con- 
sumers, while producing nothing, the power of accumulation ceased, 
almost, to exist. Debtors being everywhere at the mercy of creditors, 
sales of real estate were chiefly accomplished by help of the sheriff, 
whose perquisites were then larger than they had been at any time 
from the date of the Constitution. 

The change in the value of labor, consequent upon the stoppage 
of the circulation that followed this trivial export of the precious 
metals, cannot, Mr. President, be placed at less than $500,000,000 
a year. Wages were low, even where employment could be ob- 
tained ; but a large portion of the labor-power of the country was 
totally wasted, and the demand for mental power diminished even 
more rapidly than that for physical exertion. In the prices of 
land, houses, machinery of all kinds, and other similar property, 
the reduction counted by thousands of millions of dollars ; and 
yet, the difference between the two periods ending in 1833 and 
1842, in regard to the monetary movement, was only that between 
an excess import of $5,000,000, and an excess export of 
$2,500,000, or a total of $7,500,000 a year. No one who 



* One-tenth of the excess over 20 per cent, was reduced in December. 
1833; another tenth in 1835; a third in 1837; a fourth in 1839; the re- 
maining excess of duties being then equally divided into two parts, to be 
reduced in 1841 and 1842. 



84 



LETTERS TO THE 



studies these facts, can fail to be struck with the wonderful power 
over the fortunes and conditions of men, exerted by the metals 
provided by the Creator, for furthering the work of association 
among mankind. With the small excess of import in the first 
period, there was a steady tendency towards equality of condition 
among the poor and the rich, the debtor and the creditor ; where- 
as, with the slight excess of export in the second one, there was a 
daily increasing tendency towards inequality — the poor laboror 
and the debtor, passing steadily more under the control of the rich 
employer, and the wealthy creditor. 

Of all the machinery furnished for the use of man, there is none, 
Mr. President, so equalizing in its tendency as that known by the 
name of money ; and yet economists would have the world believe 
that the agreeable feeling which, everywhere, attends a knowledge 
that it is flowing in, is evidence of ignorance — any reference to 
the question of the favorable or unfavorable balance of trade, be- 
ing beneath the dignity of men who fancy they are following in 
the footsteps of Hume and Smith. It would, however, be as 
difficult to find a single prosperous community that is not, from 
year to year, making itself a better customer to the gold-producing 
countries, as it would be to find one that is not becoming a better 
customer to those which produce silk, or cotton. To be an im- 
proving customer, there must be in its favor a steadily increasing 
balance of trade, to be settled by payment in the commodity for 
whose production the country is fitted, whether that be cloth, or 
tobacco, silver or gold. 

The condition of the nation at the date of the passage of the 
act of 1842, was, Mr. President, humiliating in the extreme. The 
Treasury — unable to obtain at home the means required for ad- 
ministering the government, even on the most economical scale — 
had failed in all its efforts to negotiate a loan at six per cent., 
even in the same foreign markets in which it had but recently paid 
off, at par, a debt bearing an interest of only three per cent. 
Many of the States, and some even of the oldest of them, had 
been forced to suspend the payment of interest on their debts. 
The banks, to a great extent, being in a state of suspension, those 
which professed to redeem their notes, found their business greatly 
restricted by the increasing demand for coin to go abroad. The 
use of either gold or silver as currency had almost altogether 
ceased. The Federal government, but recently so rich, was driven 
to the use of inconvertible paper money, in all its transactions 
with the people. Of the merchants, a large portion had become 
bankrupt. Factories and furnaces being closed, hundreds of 
thousands of persons were totally unemployed. Commerce had 
scarcely an existence — those who could not sell their own labor, 
being unable to purchase that of others. 

Nevertheless, deep as was the abyss into which the nation had 



PRESIDENT OF THE UNITED STATES. 



85 



been plunged, so magical was the effect of the adoption of a sys- 
tem tending to the creation of a favorable balance of trade, that 
scarcely had the act of August, 1842, become a law, when the 
government found that it could have all its wants supplied at 
home. Mills, factories, and furnaces, long closed, were again 
opened ; labor came again into demand ; and, before the close 
of its third year, prosperity almost universal reigned. States 
recommenced the payment of interest on their debts. Railroads 
and canals again paid dividends. Real estate had doubled in 
value, and mortgages had been everywhere lightened ; and yet 
the total net import of specie in the first four years, was but 
$17,000,000, or $4,250,000 per annum ! In the last year occurred 
the Irish famine, creating a great demand for food ; the conse- 
quence of which was, an import of no less than $22,000,000 of 
gold — making a total import, in five years, of $39,000,000. 
Deducting from this but $4,000,000 per annum for consumption, 
it leaves an annual increase, for the purposes of circulation, of 
less than $5,000,000 ; and yet the difference in the prices of labor 
and land in 1847, as compared with 1842, would be lowly esti- 
mated, if placed at only $2,000,000,000. 

With 1847, however, there came another change of policy — 
the nation being again called upon to try the system under which 
it had been prostrated in 1840-42. The doctrines of Hume and 
Smith, in reference to the balance of trade, were again adopted 
as those by which a government was to be directed in its move- 
ments. Protection being then repudiated, the consequences were 
speedily seen in the fact, that within three years, factories and fur- 
naces were again closed, labor was seeking demand, and gold was 
flowing out even more rapidly than it had come in, under the 
tariff of 1842. The excess export of those three years amounted 
to $14,000,000; and if to this be added $15,000,000 for con- 
sumption, it follows that the reduction was equal to the total 
increase under the previous system. Circulation was rapidly 
diminishing, and a crisis was close at hand, when, fortunately 
for the advocates of the existing system, the gold deposits of Cali- 
fornia were brought to light. Since that time, we have exported 
some hundreds of millions of dollars of gold, and have contracted 
some hundreds of millions of foreign debt ; and the result is seen, 
in the facts, that money has ceased to circulate — that the primi- 
tive form of barter is taking the place of the more civilized form 
of purchase and sale — that merchants, by thousands, are utterly 
bankrupt — that counties, towns, and cities, are unable to pay the 
interest on their debts — that commerce scarcely exists — and that, 
the Federal treasury is forced to the use of treasury notes, which 
are already at a discount, ivhen compared, even, with irredeem- 
able bank notes. 

Such, Mr. President, is the result, as thus far reached, of the 



86 



LETTERS TO THE 



regulation of the currency by the central government. Such must 
it continue to be, and for the reason that, while the government 
is unceasing in its efforts to compel the people to forego the use 
of bank notes, it is equally unceasing in its efforts to reduce the 
prices of all the products of the soil, and thus compel the export of 
the precious metals. Under a different policy, gold and silver — 
flowing steadily in — would gradually take the place of paper ; 
but, under the existing one, if fully carried out, we must be reduced 
to barter — bank notes not being permitted to circulate, and the 
precious metals not being permitted to remain amongst us. Look 
in what direction we may, Mr. President, we meet, at home, with 
evidences of declining civilization ; but nowhere can higher proof 
be found, than in the history of the crusade of the central govern- 
ment against the local banks and their circulation. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia , January 29th, 1858. 



PRESIDENT OF THE UNITED STATES. 



87 



LETTER SIXTEENTH. 

" In every kingdom into which money begins to flow in greatei 
abundance than formerly, everything," says Mr. Hume, in his 
well-known Essay on Money, "takes a new face: labor and in- 
dustry gain life ; the merchant becomes more enterprising, the 
manufacturer more diligent and skilful ; and even the farmer fol- 
lows his plough with more alacrity and attention." 

That this is so, Mr. President, is well known to all. Why 
should it be so ? Because the circulation of society then increases, 
and all power — whether in the physical or social world — results 
from motion. When money is flowing in, every man is enabled 
to find a purchaser for his labor, and to become a purchaser of 
that of others. Therefore has it been, that commerce has so 
steadily increased in those countries in which the Californian and 
Australian products have so rapidly accumulated — France, Ger- 
many, and Northern and Western Europe generally. When, on 
the contrary, money flows out, the circulation diminishes, and 
labor is everywhere wasted. That labor-power being capital, the 
result of the consumption of other capital in the form of food, 
all the difference between an advancing and a declining state of 
society, is found in the fact, that in the one, there is a constant 
increase in the rapidity with which the demand for muscular or 
mental power follows its production, while in the other, there is 
a daily diminution therein. The more instantly the demand fol- 
lows the supply, the more is the force economized, and the larger 
is the power of accumulation. The longer the interval between 
production and consumption, the greater is the waste of force, and 
the less is the power of accumulation. 

Of all the machinery in use among men, there is none that exer- 
cises upon their actions so great an influence, as that which gathers 
up and divides and subdivides, and then gathers up again, to be 
on the instant divided and subdivided again, the minutes and 
quarter-hours of a community. It is the machinery of association, 
and the indispensable machinery of progress ; and therefore it is, 
that we see in all new, or poor, communities so constant an effort 
to obtain something to be used in its stead ; as is shown in various 
countries in which an irredeemable paper constitutes the medium 
of exchange. Throughout the West, a currency of some descrip- 
tion is felt to be among the prime necessities of life. So well is 
this want understood, that many Eastern banks supply notes ex- 
pressly for Western circulation — the people there passing them 
from hand to hand, because any money is better than none, and 
good they cannot get, for the reason that metallic money always 
flows from the place where the charge for its use is high, to that 



88 



LETTERS TO THE 



at which it is low. The rate of interest in the West is now enor 
mous, but each successive day witnesses the export of gold to the 
East, where it is somewhat less ; and yet, even our high interest — 
ranging, as it has done for years, between ten and thirty per cent, 
per annum — cannot prevent it from going to France and Ger- 
many, where it commands but five or six per cent. Money thus 
obeys the same law as water — seeking always the lowest level. 
The latter falls upon the hills, but, from the moment of its fall, it 
never stops until it reaches the ocean ; nor does the gold of Cali- 
fornia, or the silver of Mexico, stop until it reaches that point at 
which money most abounds, and at which, for that reason, the 
price paid for its use is lowest. 

Of all the commodities in use by man, the precious metals are 
those, Mr. President, whose movements furnish the most perfect 
test of the soundness, or unsoundness, of its commercial system. 
They go from those countries whose people are engaged in ex- 
hausting the soil, to those in which they renovate and improve it. 
They go from those at which the price of raw products, and the 
land itself, is low — from those at which money is scarce, and 
interest is high. The country that desires to attract them, and 
thus to lower the charge for the use of money, has, then, only to 
adopt the measures required for raising the price of land and 
labor. In all countries, the value of land grows with that de- 
velopment of the human faculties which results from diversity in 
the modes of employment, and consequent growth of the powei 
of combination. That power grows in all the countries of North- 
ern Europe ; and for the reason, as has been shown, that all those 
countries have adopted the course of policy recommended by Col- 
bert, and carried out by France. It declines in Great Britain, in 
Ireland, in Portugal, in Turkey, in the Eastern and Western In- 
dies, and in all countries that follow the teachings of the British 
school. It has grown among ourselves in every period of protec- 
tion ; and then — money having flowed in — land and labor have 
risen in value. It has diminished in every period in which foreign 
trade has obtained the mastery over domestic commerce. Land 
and labor have always declined in value as soon as our people 
had eaten, drunk, and worn foreign merchandise to the extent 
of hundreds of millions of dollars, beyond the value of their ex- 
ports of the rude products of the soil, and have thus compelled 
the withdrawal of the " metallic basis " of their paper circulation. 

We are told, however, by the same writer — Mr. Hume — and 
in that he is followed by the modern economists — that the only 
effect of an increase of the supply of gold and silver is that of 
" heightening the price of commodities, and obliging every one to 
pay more of those little yellow or white pieces for everything he 
purchases." Were such really the case, it would be little short of a 
miracle, that we should see money always, century after century, 
passing in the same direction — to the countries that are rich 



PRESIDENT OF THE UNITED STATES. 



89 



from those that are poor ; so poor, too, that they cannot afford 
to keep as much of it as is required for their own exchanges. 
The gold of Siberia leaves a land in which so little circulates, that 
labor and its products are at the lowest prices, to find its way to 
St. Petersburg, where it will purchase less labor, and less of either 
wheat or hemp, than it would do at home ; and that of Carolina 
and Virginia goes steadily and regularly, year after year, to the 
countries to which the people of those States send their cotton 
and their wheat, because of the higher prices at which they sell. 
The silver of Mexico, and its cochineal, travel together to the 
same market; and the gold of Australia passes to Britain by the 
ship which carries the wool yielded by the flocks. 

Every addition to the stock of money, as we are assured by the 
ingenious men of modern days, engaged in compiling treasury tables 
and finance reports, renders a country a good place to sell in, but 
a bad one in which to purchase. To what countries, however, is 
it, that men have most resorted when they desired to purchase ? 
Have they not, until recently, gone, almost exclusively, to Britain ? 
It has been so, assuredly ; aud for the reason, that there it has 
been, that finished commodities were cheaply furnished. Where 
have they gone to sell ? Has it not been to Britain ? It certainly 
has been so ; and for the reason, that there it was, that gold, cot- 
ton, wheat, and all other of the rude products of the earth, were 
dear. Where do they now most tend to go when they desire to 
purchase cloths or silks ? Is it not to France and Germany ? So 
it certainly is ; and for the reason, that there it is that raw mate- 
rials are highest, and finished ones are cheapest. Gold follows in 
the train of raw materials generally — these last being found, in- 
variably, travelling to those places at which the rude products of 
the earth command the highest prices, while cloth, iron, and manu- 
factures of iron and other metals, may be purchased at the lowest ; 
and the greater the flow in that direction, the greater is the ten- 
dency to further enhancing the prices of the former, and reducing 
those of the latter. From this it would seem, Mr. President, that 
increase in the supply of money, so far from having the effect of 
causing men to give two pieces for an article that could before 
have been had for one, has, on the contrary, that of enabling 
them to obtain for one piece the commodity that before had cost 
them two; and that such is the fact, can readily be shown. 

The stock of gold among ourselves, has, within the last few 
years, been much increased ; and yet, so far is it, from producing 
the effects above described, that the prices of wheat, cotton, to- 
bacco, and all our other products, now steadily decline, and the 
farmer and planter have in prospect, lower prices than they have 
ever seen. Why, Mr. President, is this the case ? Because, for 
more than twenty years, the central government has been engaged 
in an almost unceasing effort to promote the habit of hoarding 
the precious metals, and thus — by lessening their power of circu- 



90 



LETTERS TO THE 



lation — has almost annihilated their utility. Because, in the 
vain hope of establishing, by means of such measures, "a hard 
money currency," it has waged an almost unceasing war upon 
public and private credit — prohibiting the use of circulating- 
notes in all transactions in which it is itself concerned, and urging- 
upon the local authorities, the necessity for following its example. 
With it, freedom of trade in reference to the most important of 
all the commodities in use by man, has not consisted in letting 
the people think and act for themselves, but in compelling them 
to act in obedience to its mandates. 

The use of circulating notes tends, however, as we are assured, 
to promote the expulsion of gold. Were it to do so, Mr. Presi- 
dent, it would be in opposition to the great general law, in virtue 
of which all commodities tend to, and not from, the places at 
which their utility is greatest. Cotton-wool tends to go from 
the plantation, and to the mill. Hides tend to go from the farm, 
and to the tanner's yard. Gold and silver tend to go from Peru 
and California, and to those places at which such metals are most 
required in the arts, and at which industry is most diversified — 
the same laws thus governing all commodities, be they what 
they may. 

A bank, Mr. President, is a machine for utilizing money, by 
enabling A, B, and C, to obtain the use of it at the time when 
D, E, and F, its owners, do not need its services. The direct 
effect of the establishment of such institutions in European cities 
has always been to cause money to flow towards those cities ; and 
for the reason, that there its utility stood at the highest point. 
Even then, however, there were difficulties attendant upon the 
change of property in the money deposited with the bank — the 
owner having been required to go to the banking-house, and write 
it off to other parties. To obviate this difficulty, and thus increase 
the utility of money, its owners were at length authorized to draw 
checks, by means of which they were enabled to transfer their 
property — without stirring from their houses. 

The difficulty still, however, existed, that — private individuals 
not being generally known — such checks could, in general, effect 
but a single transfer; and thus, the recipient of money found 
himself obliged to go through the operation of taking possession 
of that which had been transferred to him, after which he had, in 
his turn, to draw a check, when he himself desired to effect an- 
other change of property. To obviate this, circulating notes were 
invented, by help of which the ownership of money is now trans- 
ferred with such rapidity, that a single hundred dollars passes 
from hand to hand fifty times a day — effecting exchanges, per- 
haps, to the extent of many thousand dollars, and without the 
parties being at any time required to devote even a single instant 
to the work of counting coin. This was a great invention, by 
aid of which the utility of money was so much increased, that a 



PRESIDENT OF THE UNITED STATES. 



91 



single thousand pieces could be made to do more work than, with- 
out it, could be done by hundreds of thousands. 

This, of course, as we are told, supersedes gold and silver, and 
causes them to be exported. So we are certainly assured, by those 
economists who regard man as an animal that must be fed, and 
will procreate — as a slave, who can be made to work only under 
the pressure of a strong necessity. Were they, however, to look, 
for once, at the real man — the being made in the image of his 
Creator, and capable of almost infinite elevation — they would> 
perhaps, arrive at a conclusion widely different. The desires of 
that man being infinite, the more they are gratified, the more 
rapidly do they increase in number. The miserable Hottentot 
dispenses with a road of any kind, but the enlightened and intel- 
ligent people of other countries, are seen passing in succession 
from the ordinary village road to the turnpike, and thence to the 
railroad ; and the better the existing communications, the greater 
is the thirst for further improvement. The better the schools 
and houses, the greater is the desire for superior teachers, and for 
further additions to the comforts of the dwelling. The more per- 
fect the circulation of society, the larger is the reward of labor, 
and the greater is the power to purchase gold and silver, to be 
used for the various purposes for which they are so admirably 
fitted ; and the greater is the tendency to have them flow to the 
places at which that circulation is established. Money promotes 
the circulation of society. The check and the bank note stimu- 
late that circulation — giving thereby value to labor and land; 
and wherever checks and notes are most in use, there, Mr. Presi- 
dent, should the inward current of the precious metals be most 
fully and firmly established. 

That such is the case, is proved by the facts, that, for a century 
past, the precious metals have tended most to Britain, where such 
notes were most in use. Their use increases rapidly in France, 
with constant increase in the inward flow of gold. So, too, does 
it in Germany, towards which the auriferous current now sets so 
steadily, that notes which are the representatives of money, are 
rapidly taking the place of those irredeemable pieces of paper, by 
which the use of coin has so long been superseded. 

Whence flows all this gold ? From the countries in which em- 
ployments are not diversified ; from those, in which there is little 
power of association and combination ; from those, in which, there- 
fore, credit has no existence ; from those, finally, which do not 
use that machinery which so much increases the utility of the pre- 
cious metals, and which we are accustomed to designate by the 
term bank-note. The precious metals go from California — from 
Mexico — from Peru — from Brazil — from Turkey — and from 
Portugal — the lands in which property in money is transferred 
only by means of actual delivery of the coin itself — to those, in 
which it is transferred by means of a check, or note. They go from 



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LETTERS TO THE 



the plains of Kansas, where notes are not in use, to New York 
and New England, where they are — from Siberia to St. Peters- 
burg — from the banks of African rivers to London and Liver- 
pool — and from the "diggings" of Australia to the towns and 
cities of Germany, where wool is dear and cloth is cheap. 

All the facts exhibited throughout the world tend, Mr. Presi- 
dent, to prove that every commodity seeks that place at which it 
has the highest utility ; and all those connected with the move- 
ment of the precious metals prove that they constitute no excep- 
tion to the rule. Bank notes — increasing the utility of those 
metals — should, therefore, attract, and not repel, them. Never- 
theless, the two nations of the world which claim best to under- 
stand the principles of commerce, are now engaged in a crusade 
against such notes ; and in the vain hope of thereby rendering 
their several countries more attractive of the produce of the mines 
of Peru and Mexico, Australia and California. The result is 
seen in the fact, that both are nearly bankrupt. 

It is a great mistake ; and its existence here is due to the fact, 
that our system of policy tends to that expulsion of the precious 
metals, which always must result from the long-continued export 
of the raw products of the earth. The administration that 
adopted what is called free trade, was the same that commenced 
the system of compelling the community to use gold instead of 
notes ; and the result was found in the total disappearance of 
coin from circulation. From that time to the present, the 
motto of the generally dominant party of the Union has been — 
"War to the death against bank notes"; and, with a view to 
promote their expulsion, laws have been passed in various States, 
forbidding their use, except when of too great size to enter freely 
into the transactions of the community. As must, however, in- 
evitably be the case, the tendency to the loss of the precious 
metals has always been in the direct ratio of the diminution in 
their utility thus produced. At one time only, in almost twenty 
years, has there been an excess import of those metals, and that 
was under the tariff of 1842. Then, money became abundant 
and cheap ; because the policy of the country looked to the pro- 
motion of association and the extension of domestic commerce. 
Now, it is scarce and dear ; because that policy limits the power 
of association, and establishes the supremacy of trade. 

Careful study of these facts, can scarcely, Mr. President, fail to 
satisfy you, that the cause of difficulty lies wholly in the central 
government ; and that, to that government it is, we are to look 
for change. The expansions and contractions of which you 
so much, and so justly too, complain, having all occurred in those 
oeriods in which the policy of the Union has tended towards the 
sacrifice of domestic commerce — towards the exhaustion of the 
soil — towards the depression of the prices of the farm and the 
plantation — and towards the expulsion of our people from the 



PRESIDENT OF THE UNITED STATES. 



93 



older States, the remedy is to be found in the adoption of one 
which shall look to the extension of domestic commerce — to the 
creation of a real agriculture — to the elevation of the rewards 
of labor employed upon the land — and to the concentration of 
our population. That policy, Mr. President — giving us that 
real free trade which you so much admire — would enable us to 
import, and to retain, abundant supplies of the precious metals, 
and thus to establish, upon a sure foundation, the hard money 
currency you so anxiously desire. 

" No other nation," as you most truly say, "has ever existed, 
which could have endured such violent expansions and contrac- 
tions of paper credits, without lasting injury." No other nation 
has been so unfortunate as to have a government always at war 
with public and private credit ; and none other, after so long a 
period of intestine war, could have retained so much vitality. — ■ 
Let the central government, Mr. President, review its action 
during the last twenty years — let it see that its policy has looked 
to the destruction of that internal commerce upon which, alone, 
a prosperous foreign one can be built — let it follow in the foot- 
steps of the patriots of the Revolution — and your hopes in the 
future will all be realized — " the buoyancy of youth, the energies 
of our population, and the spirit which never quails before diffi- 
culties, " then, but not otherwise, enabling us "to recover from 
our financial embarrassments," and "even occasioning us speedily 
to forget the lessons they have taught." Each and every period 
of what is called free trade, having ended in bankruptcy, on each 
and every occasion, general wealth, peace, happiness, and con- 
stantly increasing power, have resulted from the adoption of pro- 
tection. So, Mr. President, must it ever be — the depression and 
ruin of the agricultural interest being the necessary consequences 
of the former of these systems, and its elevation having always 
resulted from the adoption of the latter. 

With great respect, 

Your obed't servant, 

Henry C. Caret. 

Philadelphia, February 2d, 1858. 



94 



LETTERS TO THE 



LETTER SEVENTEENTH. 

Civilized communities — those communities, Mr. President, 
which have obtained that freedom of domestic intercourse which, 
as you have seen, we so sorely need — follow the advice of Adam 
Smith, in exporting their wool, and their corn, in the form of 
cloth, at little cost for transportation. Thus, France, in 1856, 
exported silks and cloths, clothing, paper, and articles of furni- 
ture, to the extent of $300,000,000 ; and yet the total weight was 
short of 40,000 tons — requiring for its transport but forty ships 
of very moderate size. 

Barbarous,, and semi-barbarous countries, on the contrary, ex- 
port their commodities in their rudest state, at heavy cost for trans- 
portation. India sends the constituents of cloth — cotton, rice, 
and indigo — to exchange, in distant markets, for the cloth itself. 
Brazil sends raw sugar across the ocean, to exchange for that 
which has been refined. We send wheat and Indian corn, pork 
and flour, cotton and rice, fish, lumber, and naval stores, to be 
exchanged for knives and forks, silks and cottons, paper and 
China-ware. The total value of these commodities exported in 
1856 — high as were then the prices — was only $230,000,000 ; and 
yet, the American and foreign ships engaged in the work of trans- 
port, were of the capacity of 6,872,253 tons — requiring for their 
management no less than 269,000 persons.* 

In the movement of all this property, Mr. President, there is 
great expense for transportation. Who pays it ? Ask the farmer 
of Iowa, and he will tell you, that he sells for 15 cents — and that, 
too, payable in the most worthless kind of paper — a bushel of 
corn that, when received in Manchester, commands a dollar ; and 
that he, in this manner, gives to the support of railroads and 
canals, ships and sailors, brokers and traders, no less than eighty- 
Jive per cent, of the intrinsic value of his products. Ask him 
once again, and he will tell you, that while his bushel of corn 
will command, in Manchester, 18 or 20 yards of cotton cloth, he 
is obliged to content himself with little more than a single yard — 
eighty-five per cent, of the clothing power of his corn having 
been taken, on the road, as his contribution towards the tax im- 
posed upon the country, for the maintenance of the machinery of 
that "free trade" which, as you, Mr. President, have so clearly 
een, is the sort of freedom we do not, at present, need. 

The country that exports the commodity of smallest bulk, is 



* This is the total tonnage that arrived from foreign countries, in that 
year. A small portion was required for the transport of manufactured com- 
modities, but it was so small as scarcely to require notice. 



PRESIDENT OF THE UNITED STATES. 



95 



almost wholly freed from the exhausting* tax of transportation. 
At Havre — ships being little needed for the outward voyage, 
while ships abound — the outward freights must be always very low. 

The community that exports the commodities of greatest bulk, 
must pay nearly all the cost of transportation. A score of ships 
being required to carry, from our ports, the lumber, wheat, or 
naval stores, the tobacco, or the cotton, required to pay for a 
single cargo of cloth, the outward freights must always be at, or 
near, that point which is required to pay for the double voyage — 
and every planter knows, to his cost, how much the price of his 
cotton is dependent upon the rate of freight, 

In the first of these, Mr. President, employments become, from 
day to day, more thoroughly diversified — the various human 
faculties become more and more developed — the power of com- 
bination tends steadily to increase — agriculture becomes more 
and more a science — the land becomes more productive — the 
societary movement becomes more stable and regular — and the 
power to purchase machinery of every kind, whether ships, mills, 
or the precious metals, tends steadily to augment. 

In the last, the reverse of this is found — the pursuits of men 
becoming less diversified — the demand for human faculty becom- 
ing more and more limited to that for mere brute force, or for the 
craft by which the savage is so much distinguished — the power 
of association tending to decline — agriculture becoming less and 
less a science, and the land becoming more and more exhausted — 
the societary movement acquiring, more and more, the fitfnlness 
and irregularity of movement you have so well described, as exist- 
ing among ourselves — and the power to obtain machinery of any 
kind tending steadily to diminish. 

The first of these, Mr. President, may be found in the countries 
of Central and Northern Europe — those which follow in the lead 
of Colbert and of France. All of these, are gradually emancipating 
themselves from the most oppressive of all taxes, the tax of trans- 
portation. All of them, therefore, are moving in the direction of 
growing wealth and power, with correspondent advance in civiliza- 
tion, and in freedom. 

The last may be found in Ireland, India, Jamaica, Portugal, 
Turkey, and these United States — the countries which follow in 
the lead of England. All of these, are becoming more and more 
subjected to the tax of transportation. All of them, therefore, 
are declining in wealth and power, in civilization, and in freedom. 

In the first, the land yields more and more with each successive 
y ear — w ith constant increase in the power of fi bushel of wheat, 
or a pound of wool, to purchase money. . In the last, the land 
yields less from year to year, with constant tendency to decline in 
the price of food and cotton. The first, import the precious metals. 
The last, export them. The first, find daily increase of power to 
maintain a specie circulation, as the basis of the higher and better 



96 



LETTERS TO THE 



currency supplied by banks. The last, are gradually losing the 
power to command a circulation of any kind, and tending, more 
and more, towards that barbaric system of commerce which con- 
sists in exchanging labor against food, or wool and corn against 
cloth. 

We may be told, however, Mr. President, that in return for 
the eighty-five per cent, of his products that, as we see, is 
paid by the farmer of Iowa, and by the Texan planter, we are 
obtaining a magnificent system of railroads — that our mercantile 
marine is rapidly increasing — that, by its means, we are to secure 
the command of the commerce of the world, &c, &c. How far 
all this is so, we may now inquire. To me, it certainly appears, 
that if this be, really, the road to wealth and power — it would 
be well to require the exportation of wheat, instead of flour, paddy 
in place of rice, cotton in the seed, corn in the ear, and lumber in 
the shape of logs, rather than in that of planks. 

Looking, first, to our internal commerce, we find a mass of 
roads, most of which have been constructed, by help of bonds, 
bearing interest at the rate of 6, 8, or 10 per cent. — bonds that 
have been disposed of, in the market, at 60, 70, or 80 per cent, 
of their nominal value, and could not now, probably, be re-sold 
at more than half the price at which they were originally bought. 
Half made, and little likely ever to be completed, these roads are 
worked at great expense — while requiring constant and great 
repairs. As a consequence of this it is, that the original pro- 
prietors have almost wholly disappeared — the stock being of little 
worth. The total amount applied to the creation of railroads hav- 
ing been about $1000,000,000, and the average present value 
scarcely exceeding 40, if even 30, per cent., it follows that 
$600,000,000 have been sunk, and with them, all power to make 
new roads. Never, at any period of our history, have we been, 
in this respect, so utterly helpless as at present. Nevertheless, 
the policy of the central government looks steadily to the disper- 
sion of our people, to the occupation of new territories, to the 
creation of new States, and to the production of a necessity for 
further roads. That, Mr. President, is the road to physical and 
moral decline, and political death, as will soon be proved, unless 
we change our course. 

The railroad interest being in a state of utter ruin, we may now 
turn to the shipping one, with a view to see how far we are likely, 
by its aid, to obtain that command of the commerce of the world, 
so surely promised to us, by the author of the tariff of '46. 
Should that prove to be moving in the same direction, the fact 
will certainly afford new and stronger proof of the perfect accu- 
racy of your own views, Mr. President, as to the sort of freedom 
we so much require. 

In a state of barbarism — person and property being insecure — 
the rate of insurance is high. Passing thence towards civiliza- 



PRESIDENT OF THE UNITED STATES. 



97 



tion, security increases, and the rate of insurance declines, as we 
see it to be so rapidly doing, in reference to fire, in all the ad- 
vancing countries of Europe. Our course, in reference to ship- 
ping, being in the opposite direction — security diminishing, when 
it should increase — the rate of insurance steadily advances, as 
here is shown : — 



Rates of Insurance 

To Cuba 

" Liverpool 

" India and China 

To and from Liverpool, on packet- 
ships, annual rates 



upon American Ships. 

1846. 1858. 

1{- per cent 1£ to 2 per cent. 

1£ " ll to 2 

If « 2£ " 

5 " 8 " 



To what causes, Mr. President, are we to attribute this extra- 
ordinary change ? May it not be found in the fact, that the more 
we abandon domestic commerce, and the larger the amount of 
taxation imposed upon our farmers for the maintenance of trans- 
portation, the greater becomes the recklessness of those who gain 
their living out of that taxation ? Look back to the last free trade 
period — that from 1837 to 1841 — and you will find phenomena 
corresponding precisely with those which are now exhibited, 
although not so great in magnitude. At present, the utter reck- 
lessness — the total absence of conscientious feeling — here exhi- 
bited, is such as to astonish the thinking men of Europe. 
Railroad accidents have become so numerous as scarcely to attract 
even the momentary attention of the reader, and the loss of life 
becomes greater from year to year. Steamers are exposed to the 
storms of the lakes, that are scarcely fit to navigate our rivers. 
Ships that are unfit for carrying insurable merchandise, are em- 
ployed in the carriage of unfortunate passengers — they being the 
only commodity, for whose safe delivery the ship-owner cannot be 
made responsible. Week after week, the records of our own and 
foreign courts, furnish new evidence of decline in the feeling of ie- 
sponsibility which, thirty years since, characterized the owners of 
American ships, and the men therein employed. 

Look where we may, Mr. President, on the sea, or on the land, 
evidences of demoralization must meet our view. " Stores and 
dwellings " — and here I give the words of a New York journal — 
" are constructed of such wretched materials as scarcely to be able 
to sustain their own weight, and with apologies for walls which 
tumble to the ground, after being exposed to a rain of a few hours' 
duration, or to a wind which possesses sufficient force to set the 
dust on the highways in motion. Entire blocks of edifices are 
put up, with the joists of all so connected with each other, as to 
form a complete train for the speedy communication of fire from 
one to another. Joists are built into flues, so that the ends are 
exposed to becoming first heated, and then ignited by a flying spark. 



98 



LETTERS TO THE 



Rows of dwellings and warehouses are frequently covered with a 
single roof, which has not, in its whole extent of combustible ma- 
terial, a parapet wall, or other contrivance, to prevent the spread 
of the flames in the event of a conflagration." 

The feeling of responsibility, Mr. President, grows with the 
growth of real civilization. It declines with the growth of that 
mock civilization, but real barbarism, which has its origin in the 
growing necessity for ships, wagons, and other machinery of trans- 
portation. The policy of the central government tends steadily 
towards its augmentation, and hence it is, that American shipping 
so steadily declines in character, and in the proportions which it 
bears to that of the foreigners with whom we are required to 
compete. 

Two years since, we were told, that our shipping already ex- 
ceeded 5,000,000 tons — that we had become the great maritime 
power of the world — and, of course, that this great fact was to 
be received as evidence of growing wealth and power. Last year, 
however, exhibited it as standing at only 4,8^1,000 tons, and 
future years are likely to show a large decrease — ships having 
become most unprofitable. More than four-fifths of the products 
of Western farms, and South-western plantations, are, as we have 
seen, taken for the support of railroads and ships ; and yet, the 
roads are bankrupt, while the ships have done little more, for some 
years past, than ruin the men who owned them. Such being the 
case, it seems little likely, that it is by means of sailing ships we 
are to acquire that control of the commerce of the world, so con- 
fidently promised when, in 1846, we were led to abandon the 
policy which looked to the creation of a domestic commerce, as 
the true foundation of a great foreign one. What are the pros- 
pects in regard to that higher description of navigation, which 
invokes the aid of steam, I propose to show in another letter — 
remaining, meanwhile, Mr. President, 

Yours, very respectfully, 

Henry O. Carey. 

Philadelphia, February Uh, 1858. 



PRESIDENT OF THE UNITED STATES. 



99 



LETTER EIGHTEENTH. 

Every improvement in the construction of the ship tends to 
lessen the proportion borne by her tonnage, to the weight of the 
commodities to be moved. Every improvement in the quality of 
the commodities moved, tends to augment the proportions borne 
by the value transported, to the tonnage of the ships required for 
its transportation. Here, Mr. President, is a simple principle, 
by aid of which we may, perhaps, be enabled to arrive at some 
conclusion in reference to the tendency of our present policy — 
progress towards civilization having, everywhere, manifested itself 
in a diminution in the proportions borne by the machinery of 
transportation, to the value of the things transported. 

In the first year which followed the adoption of the Compromise 
tariff, that of 1834-5, we sent abroad, cotton and tobacco, food 
and lumber, to the amount of $92,000,000 ; and in that year, the 
shipping, domestic and foreign, that cleared for foreign ports, 
amounted to 2,030,000 tons. Six years later, in 1840-41, when 
that tariff had but begun to operate, we exported, of the 
same rude products, $98,000,000: — the quantity of shipping- 
clearing from our ports having, in the same period, risen to 
2,353,000 tons. Two years since, as has been shown, the total 
value of these exports was $230,000,000, while the quantity of 
shipping leaving our ports amounted to little less than seven mil- 
lions of tons — the increase in the former, in twenty years, having 
been but 150 per cent., while that of the latter had been little short 
of 350 per cent. 

If there is, Mr. President, any single proposition in social 
science, that cannot be disputed, it is, that wealth, civilization, 
and power, increase in the ratio of the diminution of the machinery 
required for performing the work of transportation. On the turn- 
pike, a single horse performs the work, that before had been done 
by two ; and, on the railroad, a single car transports as great a 
weight as, at first, had been done by hundreds of horses and men, 
carts and wagons. With every movement in that direction, land 
becomes more valuable, and man becomes more free. With each 
and every one in the opposite direction, the value of land declines, 
and man becomes more and more enslaved. 

The first and heaviest tax, Mr. President, to be paid by land 
and labor is that of transportation ; and it is the only one, to 
which the claims of the State itself are forced to yield precedence. 
Increasing in geometrical proportion, as the distance from market 
increases arithmetically, therefore it is, that agreeably to tables 



100 



LETTEKS TO THE 



recently published, corn that would produce at market $24.75 per 
ton, is worth nothing, at a distance of only a hundred and sixty 
miles, when the communication is by means of the ordinary wagon 
road — the cost of transportation being equal to the selling price. 
By railroad, under ordinary circumstances, that cost is but $2.40 — 
leaving to the farmer $22.35, as the amount of tax saved to him 
by the construction of the road ; and if we now take the product 
of an acre of land, as averaging a ton, the saving is equal to inte- 
rest, at six per cent., on $370 an acre. Assuming the product 
of an acre of wheat to be twenty bushels, the saving is equal to 
the interest on $200 ; but, if we take the more bulky products — 
hay, potatoes, and turnips — it will be found to amount to thrice 
that sum. Hence it is, that an acre of land, near London, sells 
for thousands of dollars, while one of exactly equal quality may 
be purchased in Iowa, or Wisconsin, for little more than a single 
dollar. The owner of the first enjoys the vast advantage of the 
endless motion of its products — taking from it several crops in 
the year, and returning to it, at once, a quantity of manure equal 
to all he had abstracted ; and thus improving his land from year 
to year. He is making a machine ; whereas, his western compe- 
titor, forced to lose the manure, is decoying one. Having no 
transportation to pay, the former can raise those things of which 
the earth yields largely — as potatoes, carrots, or turnips; or 
those whose delicate character forbids that they should be carried 
to distant markets ; and thus does he obtain a large reward for 
that continuous application of his faculties, and of his land, which 
results from the power of combination with his fellow-men. 

In the case of the latter, all is widely different. Having heavy 
transportation to pay, he cannot raise potatoes, turnips, or hay, 
because of them, the earth yields by tons ; as a consequence of 
which, they would be almost, even when not wholly, absorbed on 
the road to market. He may raise wheat, of which the earth 
yields by bushels ; or cotton, of which it yields by pounds ; but if 
he raise even Indian corn, he must manufacture it into pork, before 
the cost of transportation can be so far diminished, as to enable 
him to obtain a proper reward for labor. Rotation of crops being, 
therefore, a thing unknown to him, there can be no continuity of 
action, in either himself or his land. His corn occupies the latter 
but a part of the year, while the necessity for renovating the soil, 
by means of fallows, causes a large portion of his farm to remain 
altogether idle — although the cost of maintaining roads and fences 
is precisely the same, as if every acre were fully occupied. 

His time, too, being required only for certain portions of the 
year, much of it is altogether lost — as is that of his wagon and 
horses — the consumption of which latter is just as great as if they 
were always at work. He, and they, are in the condition of 
steam-engines, constantly fed with fuel, while the engineer as 



PRESIDENT OF THE UNITED STATES. 



101 



regularly wastes the steam that is produced — a proceeding in- 
volving heavy loss of capital. Further stoppages of employment 
— both for his land and for himself — resulting from changes in 
the weather, are consequent upon this limitation in the variety of 
things that may be cultivated. His crop, perhaps, requires rain 
that does not come, and his corn, or cotton, perishes of drought. 
Once grown, it requires light and heat, but in their place come 
clouds and rain ; and it and he are nearly ruined. The farmer 
near London, or Paris, is in the condition of an underwriter, who 
has a thousand risks, some of which are maturing every day ; 
whereas, the distant one is in that of a man who has risked his 
whole fortune, on a single ship. Having made the voyage, she 
arrives at the entrance of her destined port, when, striking on a 
rock, she is lost, and her owner is ruined. Precisely such is the 
condition of the farmer who — having his all at risk on his single 
crop — sees it destroyed by blight, or mildew, almost at the mo- 
ment when he had expected to make his harvest. With isolated 
men, all pursuits are extra-hazardous ; but as they are enabled 
to approach each other, and combine their efforts, the risks dimin- 
ish, until they almost altogether disappear. Combination of ac- 
tion thus makes of society, a general insurance office, by help of 
which, each and all of its members are enabled to secure them- 
selves, against almost every imaginable risk. 

Great, however, Mr. President, as are these differences, they 
sink almost into insignificance, compared with that which exists, 
in reference to the maintenance of the powers of the land. The 
farmer distant from market is always selling the soil, which con- 
stitutes his capital ; whereas, the one near London, not only re- 
turns to his land, the refuse of its products, but adds thereto, the 
manure resulting from the consumption of the vast amount of 
wheat brought from Russia and America — of cotton brought 
from Carolina and India — of sugar, coffee, rice, and other com- 
modities, yielded by the tropics — of lumber and of wool, the pro- 
ducts of Canada and Australia — not only maintaining the powers 
of his land, but increasing them from year to year. 

The more perfect the Jfower of combination, the greater is the 
yield of the land ; the higher are the prices of the rude products 
of the soil ; the smaller is the bulk of the commodities to be trans- 
ported ; and the larger are the proportions borne by their value 
to the machinery required for their transportation. That, Mr. 
President, is the road towards civilization, but it is, also, the very 
opposite of the road that we ourselves are travelling — the quan- 
tity of machinery required for the work of transportation, increas- 
ing with a rapidity far greater than that which marks the growth 
of values. This latter being the certain road towards barbarism, 
we need look but little further for the causes of the decline in 
morals, wealth, and power, now so rapidly in progress throughout 
the Union. 



102 



LETTERS TO THE 



The power to command the use of improved machinery, grows 
with the growth in value of the things requiring to be transported 
— the farmer whose proximity to the mill enables him to send his 
grain to market in the form of flour, being far more able to con- 
tribute to the improvement of roads, than his fellow-farmer who 
is forced to send it in that of wheat. It diminishes as the things 
to be transported decline in value, and hence the weakness of 
countries like Portugal, Turkey, and India, that are becoming 
more and more dependent on distant markets. It diminishes 
with us, and hence it is that our dependence on foreign 
countries, even for efficient means of transportation, so rapidly 
increases. 

More than twenty years have now elapsed, since the arrival of 
the Great Western steamer, and the establishment of the fact, that 
we could avail ourselves of the power of steam, for the passage 
of the broad Atlantic. For nearly all that time, we have been 
struggling to obtain steam communication, by means of American 
ships, with Europe — the government aiding in the effort, to the 
extent of many millions. What, however, has been the result of 
all our efforts ? Ship after ship has been lost, until confidence in 
American steamers has almost disappeared, and with it, the lines 
of steamers. The Collins line, as it still is called, now dispatches 
a single ship per month, and that, too, chiefly owned in Europe: 
The Havre line dispatches a monthly ship. The Bremen line has 
wholly disappeared. Mr. Vanderbilt has yet three ships engaged 
in the European trade, but the recent accident to one of them can 
scarcely fail to be felt injuriously by all — annihilating the little 
confidence that previously had existed. — The day is fast approach- 
ing, Mr. President, when no single steamer carrying the American 
flag, will float upon the ocean, except government ships, and the 
very few private ones engaged in the coasting trade, in which 
foreign competition is wholly interdicted. Such being the facts, 
and such the prospects, is it probable, that we shall long main- 
tain that superiority on the ocean, which so certainly existed at 
the time when the general government entered upon the career 
of centralization ? It would seem not. O Beaten in agriculture, 
and beaten in manufactures, we are likely to be even yet more 
thoroughly distanced in regard to ships ; and for the reason, that 
our policy tends steadily towards lessening the value of the com- 
modities seeking to be transported. 

The French policy — looking, as it does, to the emancipation 
of land and labor from the tax of transportation — is directly the 
reverse of ours. We tax ourselves for the maintenance of millions 
of tons of shipping, required for the transport of merchandise to 
be given to France, in exchange for millions upon millions of tons 
of food and other commodities, so reduced in bulk, that their 
weight, in tons, is counted by thousands. Freed, by that reduc- 



PRESIDENT OF TIIE UNITED STATES. 



103 



tion, from all the cost of transportation, France is enabled to in- 
voke the aid of steam, and to such extent, too, that the arrivals 
of her own steamers, in her own ports, amounted, in 1856, to no 
less than 8,000 tons per week, and more than four hundred thou- 
sand, in the year. 

France, Mr. President, is carrying out your own most excel 
lent views in regard to commercial policy — laying a broad foun- 
dation of domestic commerce, as a means of obtaining the largest 
power of intercourse with the outer world. We, on the contrary 
are destroying the domestic commerce, in the vain hope of thereby 
building up a great foreign one. Why -have we no steamers run- 
ning to Rio, to Buenos Ayres, to Montevideo, to Valparaiso, to 
Lima, or Australia ? Because we have little to sell, except those 
rude products of the earth, which the people of Brazil, or Chili, do 
not need to buy. Before they can do so, those commodities must 
pass through the looms of Manchester and Lyons, and hence it 
is, that nearly all our intercourse with the world is burthened 
with costs of transportation so enormous, that our farmers are 
generally poor, although themselves the owners of the land. In 
search of trade, we fit out expeditions against Japan — involve 
ourselves in disputes with Paraguay and Buenos Ayres — explore 
African and South American rivers — and maintain an enormous 
diplomatic establishment throughout this continent ; and yet, have 
scarcely any thing to sell, except to the people of France and 
England. 

What we need, Mr. President, is that real free trade, which 
consists in maintaining direct intercourse with the world at large ; 
but that we cannot have, so long as we shall continue to export 
our commodities in their rudest state. The farmer who has but 
one mill at which to grind his grain, has no freedom of trade. 
The miller and the baker have it — they being free to sell to whom 
they please. Our farmers and planters have none of it — being 
compelled to send their products to the distant mills, before they 
and their neighbors can make exchanges, even among themselves. 
They need, as you so well have seen, that real free trade which 
would enable the planter of Mississippi to exchange with the 
farmer of Illinois — receiving cloth, lead, and iron, in exchange 
for sugar and cotton. "That " as you have said, "is the free 
trade we want." That we may have it, we must diversify the 
employments of our people ; we must enable them to combine 
their efforts ; we must relieve our farmers from a tax of trans- 
portation, greater than is required for maintaining, ten times 
over, all the armies of Europe ; we must enable ourselves to 
pay our debts to the land, and thus obtain a real agriculture, in 
place of the system of spoliation that now exists ;* we must 
establish a balance of trade in our favor, payable in the precious 
metals, and thus enable ourselves to maintain the real specie cur- 



104 



LETTERS TO THE 



rency, that you so much desire to see established. — Those things 
done, we shall be able to command the use of machinery of 
exchange of the highest order — fleets of steamers taking the place 
of sailing ships, and the use of money becoming obtainable, with- 
out the payment of a higher interest than is paid in any other 
country of the world, claiming to be held as civilized. Such, 
Mr. President, is the real road to wealth and power ; but, as you 
have seen, all our movements are in the reverse direction. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, February 9th, 1858. 



PRESIDENT OF THE UNITED STATES. 105 



LETTER NINETEENTH. 

"Nothing," says Hume, "is esteemed a more certain sign of 
the nourishing condition of any nation, than the lowness of inte- 
rest" — or, in other words, the moderation of the charge for the 
use of that greatest of all the instruments used by man, called 
money. It is, Mr. President, an evidence of the existence of that 
feeling of security, which always attends advance of civilization — 
the rate of interest being very high in all countries in which pro- 
perty is insecure, and declining steadily as we pass outward, to- 
wards those in which men are more and more enabled to combine 
their efforts for the promotion of the common good — in which 
population and wealth increase — in which the land becomes more 
productive — in which the prices of raw materials tend to rise, and 
those of finished commodities to fall — and in which, consequently, 
the power to purchase the precious metals augments from year to 
year. 

That power, and the tendency to decline in the rate of interest, 
exist in every community, in the precise ratio of the activity of the 
circulation of labor and its products. The more perfect the ex- 
isting supply of money, and the more it is utilized, the more rapid 
is the circulation, and the greater the tendency to increase in the 
ability for further purchases. The less the supply, and the less it 
is utilized, the slower is the societary circulation, and the greater 
is the tendency to lose the money that had before been purchased. 
In the one case, labor obtains power over capital, and the rate of 
interest falls. In the other — capital obtaining increased control 
over labor — the rate of interest rises. The first of these classes 
of phenomena obtains in all those countries, that follow in the lead 
of France — importing raw materials, and exporting the products 
of their soil in the most perfect form. The second is found in all 
of those, that follow in the direction now indicated by England — 
exporting the rude products of the soil, and re-importing them 
again in a finished state ; as is the case with Ireland, India, Ja- 
maica, Portugal, Turkey, Mexico, and all the States of Southern 
America. 

In further proof of this, we may take the various phenomena 
presented by ourselves, as our policy has changed from time 
to time, within the last half century. In the period of free 
trade that followed the close of the great European war, circula- 
tion almost ceased — labor was everywhere wasted — production 
was small — and money was scarce and high. In that which fol- 
lowed the passage of the highly protective act of 1828, evei7thing 
was different — the circulation having then been rapid, labor in 
demand, production great, and money low in price. The scene 
f 



106 



LETTERS TO THE 



being once more changed, production declined, while money rose 
with great rapidity — becoming, at length, so entirely unattain 
able, that banks suspended, States defaulted, and the Federal 
government was wholly bankrupt. The protective policy being 
again adopted, production increased with great rapidity, while 
the rate of interest fell. It has now been high for years, and for 
the reason, that production has been steadily and regularly de- 
clining in its ratio to the population. In proof of this, we have, 
Mr. President, the fact, that the consumption of food, cloth, 
and iron, bears now a smaller proportion to the numbers of the 
people, than it did ten years since. The facts of the past three 
years thus correspond, exactly, with those observed in those 
that followed 1836. Interest was then high — foreign loans were 
large — and emigration to the West was great. Speculation was 
then rife, as it so recently has been ; but daily diminution of pro- 
duction laid the foundation of the distress and ruin, that became 
so universal in 1842. 

That real prosperity is totally inconsistent with an advancing 
rate of interest, is a fact whose truth is proved by every chapter 
in the world's history. In that direction, lie centralization and 
slavery — increase in the charge for the use of money being evi- 
dence of growth in the power of the accumulations of the past, 
over the labor of the present — of capital over labor. In proof 
of this, we have the fact, that throughout an important portion 
of the Union, the pro-slavery feeling keeps steady pace with the 
exhaustion of the land, consequent upon the export of its products 
in their rudest shapes — with the export of the precious metals — 
and with the increase in the price of money. 

Money is often spoken of as capital ; and thus we are told, 
that interest is high, because " capital is scarce." There would, 
however, be as much propriety in saying, that rents, tolls, or 
freights, were high, because capital was scarce. Interest is always 
high, when money, from whatsoever cause, is scarce ; and the high 
price then paid for its use, causes a deduction from the profits of 
the trader, from the rents of houses, and from the freights of 
ships. The owner of money then profits at the expense of all 
other capitalists. Interest is the compensation paid for the use 
of the instrument called money, and for that alone. In countries 
in which it is high, the rate of profit is necessarily so, because 
the charge for the use of money enters so largely into the trader's 
calculations. 

The high profits of our Western States are said to be the cause 
of the high interest that is paid ; but here, as everywhere, modern 
political economy substitutes effect for cause. Interest there is 
high, because money — the thing for which, alone, interest is paid — . 
is scarce ; and because its scarcity enables the men who can com- 
mand the use of machinery of exchange, to obtain large profits, 
by means of standing between the producer who needs advances 



PRESIDENT OF THE UNITED STATES. 



107 



on his corn, and the consumer who requires credit on his cloth 
and iron. Wherever it is scarce, circulation is sluggish ; the 
waste of the physical and mental power is great ; and the man 
who can then command the use of that indispensable machinery, 
becomes even more the master of him who desires to use it, than 
the transporter does, when crops are large, and ships are scarce. 

Daily experience, Mr. President, teaches the farmer, that when 
money — the machine by means of which exchanges are made 
from hand to hand — circulates freely, he becomes more prosper- 
ous from day to day ; whereas, when it is scarce, and circulates 
slowly, his prosperity disappears. It is not capital that is needed, 
but money — the machine by help of which the products of labor 
and capital are kept in motion, and without which they can move 
only in the fashion of primitive times, when skins were traded for 
knives and cloth. Our actual capital, in Ifouses, lands, factories, 
furnaces, mines, ships, roads, canals, and other similar property, 
has, in the last ten years, been increased by the application of 
labor to the extent of thousands of millions of dollars ; and yet, 
we everywhere see roads half finished, and unlikely soon to be 
completed, although laborers are seeking employment ; mills 
stopped for want of demand for their products ; laborers unable 
to sell their labor ; and men of business compelled to curtail their 
operations, because of the difficulty experienced, in obtaining the 
means with which to pay their debts. Why is this so ? Not, 
certainly, because of any diminution of capital, for that is greater 
than it has ever been. 

Were it possible now to announce, that, by reason of any change 
of policy, the export of gold would be stopped, and that the quan- 
tity in the country would steadily be increased, by retaining here the 
produce of California, money would forthwith become abundant and 
cheap — circulation would recommence — and prosperity would reign 
throughout the land ; and yet, the difference in the ensuing year, 
would not amount to a quarter of one per cent, of the value of 
the land and labor of the country. Capital would be increased 
by a portion so minute as scarcely to be discernible, and yet the 
money value — the value at which it would be exchanged — would 
be augmented by thousands of millions. At present, all is stag- 
nant, and there is little force. Then — all becoming life and mo- 
tion — the force exerted would be great. 

It is not, however, Mr. President, in the quantity of money 
held by a community, that we are to find the test of its prosperity, 
or the index to the rate of interest ; but in the rapidity with which 
it circulates. Steadiness and regularity in the motion of society 
are requisite for the production of confidence, and increase of mo- 
tion and force results from confidence. The gold held by the 
banks, the people, and the government, is said to exceed by more 
than $150,000,000 what was held but a few years since; but — 
there being no regularity in the societary movement — credit is 



108 



LETTERS TO THE 



much impaired. As a consequence of this it is, that the circula- 
tion is sluggish, and that the rate of interest has, for years, been 
so very high, as greatly to limit the disposition to engage in any 
operations requiring time for their completion. The moneyed 
capitalist profits by this — obtaining treble or quadruple the usual 
rate of interest ; but the miner, the founder, the cotton-spinner, 
and the cloth-maker, have been, and are being, ruined by it. 

The existence of credit is an evidence of the existence of that 
confidence of man in his fellow-man, which always attends the 
growth of real civilization. How it tends to stimulate the socie- 
tary motion, and thus to augment the productive power, is so well 
exhibited by a recent French economist, that I am induced, Mr. 
President, to present for your consideration, the following extract 
from his work : — 

''On one side," says M. Coquelin, "we see a machinist, a 
blacksmith, and a wheelwright, whose shops are closed, not per- 
haps because of any want of raw materials, but because of absence 
of demand for their products. Elsewhere, are manufacturers in 
want of machinery, and farmers in need of agricultural implements. 
Why, now, is it that these latter do not give to the former, the 
orders for want of which they continue idle ? Because these latter 
must be paid in money, which money the others cannot at the 
moment pay ; and yet they have, in shops or barns, abundance 
of commodities that they desire to sell, and by the possession of 
which many of the neighboring people would be greatly served. 
Why do they not exchange? Because — direct exchange being 
impossible — they must commence by selling; and, as they, in 
their turn, must demand money, they can find no purchasers. 
Here we have a suspension of labor on both sides, and it is in 
cases like this, that production is languid and society vegetates, 
although surrounded by all the elements of life, motion, and 
prosperity. 

"Means might, however, be found for removing the difficulty 
that thus exists. If the machinist, the blacksmith, and the wheel- 
wright, refuse to deliver their products, except for ready money, 
it is not because of any doubt they entertain of the future solvency 
of the farmer, or the manufacturer ; but because it is inconvenient 
to them to make credit sales that would diminish their active 
capital, and perhaps disable them from continuing their opera- 
tions. Let each one, then, in delivering his articles, as he has 
confidence in the future ability of those who now demand them, 
require only, in place of money, a note that, in his turn, he can 
use, with those who furnish him. On this condition, circulation 
will be re-established, and labor will be resumed. True, but we 
must first be sure that these notes, when accepted, will be received 
elsewhere, as, otherwise, it becomes at once a simple sale on credit. 
This certainty, however, cannot be obtained, and therefore they 
refuse the notes ; not because of any suspicion of their ultimate 



PRESIDENT OF THE UNITED STATES. 



109 



value, but because of doubts of the possibility of disposing of 
them. At this moment a bank intervenes, and says : — 1 You, 
machinist, deliver your machinery ; you, blacksmith, your instru- 
ments ; you, ploughman, your raw materials ; you, manufacturer, 
your manufactures : accept, with confidence, notes payable at a 
future time, provided you have full belief in the goodness of 
those who will thus become your debtors. I will take charge of 
all those notes, and hold them until they shall become due — giv- 
, ing you in exchange other notes, issued by me, that you will be 
certain to find of universal acceptation.' Forthwith, all difficulty 
is at an end — sales being made, goods circulating, and produc- 
tion becoming animated. There are no longer raw materials, in- 
struments, nor products of any description, remaining, even for a 
moment, unemployed." 

There is, here, Mr. President, no change in the quantity of capital 
owned by the community, and yet, its members are seen passing 
from a state of apathy and idleness to one of activity and produc- 
tiveness — enabling every one to sell his labor — receiving in ex- 
change the commodities required for the consumption of wives and 
families, who before were like to suffer for want of the common 
necessaries of life. What, however, is it that gives value to these 
notes, and why is it that they circulate so much more freely than 
those of the blacksmith and the farmer ? Because there exists in 
the community, a confidence that behind them stands a pile of 
money sufficient to redeem each and every one of them, when- 
ever, and however, presented. Without the existence of that be- 
lief, they would not circulate, as would soon be seen, were there 
established a drain of gold — producing a steady diminution of 
the quantity in the possession of the bank, until at length even a 
single note failed to be paid on presentation. From that moment 
their circulation would be stopped ; the suspension of movement 
would again take place — the blacksmith, the machinist, and the 
wheelwright, again mourning over instruments that they would 
gladly exchange for food and cloth - 7 and the farmer and the manu- 
facturer suffering from the difficulty of obtaining machinery, for the 
better production of food and clothing. Money is to society what 
fuel is to the locomotive, and food to the man — the cause of 
motion, whence results poicer. Withdraw the fuel, and the ele- 
ments of which water is composed cease to move, and the machine 
becomes stationary. Withdrawal of the food from man, is followed 
by paralysis and death ; and such, precisely, is the effect of failure 
of the necessary supply of money — the producer of motion, among 
the elements of which society is composed. 

When, therefore, the farmer complains that money is scarce, 
and the laborer, mechanic, and manufacturer, repeat the complaint, 
they are right. It is money that is needed, and their common 
sense does not in any manner deceive them. In every country of 
the world, pleasant feelings are excited by hearing of the incom- 



110 



LETTERS TO THE 



ing of gold and silver, because therewith are associated ideas 
of activity and energy ; while, on the contrary, fear and sorrow 
are excited by their outgoing — there being therewith associated 
ideas of dulness, inactivity, suffering, and death. The former, 
Mr. President, have been the feelings prevalent throughout this 
country in the closing years of the several trials we have made of 
the protective policy — to wit, in 1816, 1834, and 1846 — the 
precious metals having then flowed in, confidence having been 
mutual, and money having been readily obtainable at the legal 
rate of interest. The latter feelings have prevailed in the closing 
years of every trial of the free-trade system — those metals having 
then flowed out — confidence having disappeared — and the charge 
for the use of money having ranged from 12 to 50 per cent. 

The cause of all the differences then observed, is to be found 
in the fact, that in the first, the policy of the central government 
has tended to promote the growth of combination among our peo- 
ple — to increase the facilities of exchange — and to augment pro- 
duction ; whereas, in the other, it has tended to destroy the power 
of association — to lessen the facilities of intercourse — and to 
diminish the productive power. In the one, we have been enabled 
to obtain improved machinery — passing from the turnpike to the 
railroad — from the sailing ship to the steamer — from the hand- 
loom to the power-loom — and from irredeemable paper-money to 
a real specie circulation. In the other, our machinery has steadily 
deteriorated — railroads going to ruin — steamers diminishing in 
number — the spindle and the loom giving place to the wagon — 
and specie disappearing, to be replaced by the inconvertible notes 
of cities, counties, and banks, and of the national treasury itself. 

Diminution in the rate of interest, Mr. President, is an evidence 
of advancing civilization. With us, the rate increases, and there- 
fore it is, that each successive year brings with it new combinations 
for procuring a repeal of the laws limiting the rate at which 
money may be lent. The cause of all this, is to be found in the 
fact, that the policy of the central government looks steadily to- 
wards an increase in the power of the trader, and in the tax of 
transportation — augmenting, as it does, the quantity of shipping 
required for transporting any given value of our products, and 
thus diminishing the power to purchase that highest and best of 
all the machinery of exchange, called money. Under a different 
system, that power would steadily increase, and usury laws would 
gradually die out — the standard rate of interest falling below the 
legal one. All the efforts for the repeal of those laws, are to be 
regarded only as furnishing additional evidence of the growing 
power of capital over labor — > always a characteristic of declining 
civilization. 

Our present position, Mr. President, is precisely similar to tha 
described in the above extract from M. Coquelin's excellent litth 
book. With a large supply of lands, houses, corn, cotton, am 



PRESIDENT OF THE UNITED STATES. 



Ill 



other commodities and things, we have little commerce among 
ourselves. Corn abounds, but the laborer perishes for want of 
food. Houses abound, but wives and children wander through 
our streets for want of shelter. Ships abound, but their owners are 
ruined for want of freights. Coal abounds, and yet men, women, 
and children perish of cold. Commerce, so far as regards the 
sale of labor, has almost ceased to exist. Why is it so ? Because 
money has ceased to circulate, and in the absence of that circula- 
tion, the societary movement, called commerce, can have no exist- 
ence. Why has it ceased to circulate? Because confidence has 
wholly disappeared. Why has it disappeared ? Let us inquire. 

History, as we are told, is philosophy teaching by example. 
What, then, does history tell us ? When has confidence most 
prevailed ? Has it not been in the closing years of the three pro- 
tective periods — those periods in which there was an inward flow 
of the precious metals ? When has it most entirely disappeared ? 
Has it not been in the closing years of the three free-trade periods 
— those periods in which gold and silver flowed outwards'? — . 
When has the price of money been most regular ? Has it not 
been in the protective periods ? When has it been most irregular ? 
Has it not been in the free-trade ones ? When have we become 
rich and strong ? Has it not been in the protective periods ? 
When have we become gradually poorer and weaker — ending 
with general bankruptcy ? Has it not been in the free-trade pe- 
riods ? When has labor acquired power over capital ? Has it 
not been in the protective periods ? When has capital acquired 
power over labor ? Has it . not been in the free-trade periods ? 
To these questions, the answer must be in th& affirmative — our 
tendency in the one having, always, been towards localization and 
freedom, and in the other, as regularly, towards centralization and 
slavery. 

Such, Mr. President, having been the law of the past, what is 
to be that of the future ? If protection has given us wealth, 
strength, credit, and power, in the past, must it not do the 
same in the future ? If the system called free trade has given us 
poverty, distrust, and weakness, in the past, can it do otherwise in 
the future ? Assuredly not, and for the reason, that it looks to 
the exhaustion of the soil, the impoverishment of the farmer, the 
increase of the power of the trader in goods and money, the 
annihilation of the power to obtain the machinery required for 
reducing the labors of production, and the destruction of confi- 
dence of man in his fellow-men. So long as that system shall 
be continued, there can be no general revival of confidence, be- 
cause property must, and will, become less and less secure. That 
it maybe revived, it is needed that the central government change 
its system — abandoning at once, and for ever, the idea of main- 
taining a hard money currency w r hile pursuing a policy tending to 
the expulsion of the precious metals, and, that of building up a 



112 



LETTERS TO THE 



great foreign commerce, by aid of measures tending to destroy 
the domestic one. 

That further progress, in its present direction, must be produc- 
tive of effects the most disastrous, will be obvious to you, Mr. 
President, on a careful study of the facts presented for considera- 
tion by the last few years. With a larger supply of the precious 
metals than we ever before possessed, but without the smallest 
confidence in the duration of the apparent prosperity, gold has 
been secreted to such extent, that the price of money has been so 
high as to have proved utterly destructive to the really working- 
men of the community — all their apparent profits having been 
absorbed by the payment of usurious interest. Mills, factories, 
mines, and furnaces, as a consequence, have been closed, to the 
utter ruin of their owners. Workmen, of all descriptions, have 
been obliged to seek in the West the food denied to them at home. 
There arrived, they have found the public lands monopolized by 
speculators, to whom they have been obliged to pay double, treble, 
or quadruple prices, for the little land they needed. Thus plun- 
dered at the outset of their operations, they have been compelled 
to borrow money, paying for its use, at every rate from 20 to 10 
per cent, a year. The bubble having burst, they find themselves 
in the hands of their usurious creditors, and now the sheriff will 
complete the work. 

The whole policy of the central government tends, thus, to the 
annihilation of the really useful portion of society, and to the ag- 
grandizement of traders in money, in land, in cloth and cotton, in 
principles, and in men ; and, as a necessary consequence, the de- 
moralization of society becomes more complete with each succes- 
sive year. The range of honest employment becoming daily more 
and more restricted, men are driven, by sheer necessity, to engage 
in schemes of public and private plunder, from which, under other 
circumstances, they would shrink back, shuddering at their very 
thought. — How long, Mr. President, can such a state of things 
endure ? Is it possible, under such a course of operation, to 
build up a stable system ? That it is not, is proved by all the 
facts of history. A change must come in the policy of the govern- 
ment, or the government itself will undergo a change. 

The commerce that you, Mr. President, have so well described, 
as being the sort of free trade that we really need, is all that is 
required to render money abundant and easily obtainable at a 
moderate interest, with larger power to obtain mills, steamers, 
money, and all other machinery, than is now possessed by any 
other community of the world. Give the people but that com- 
merce, and confidence will be at once restored. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, February 12th, 1858. 



PRESIDENT OF THE UNITED STATES. 



113 



LETTER TWENTIETH. 

That the rate of interest, throughout the Union, is very high, 
and that it constitutes a serious obstacle to the extension of manu- 
factures, to the development of our vast treasures of coal, iron, 
and other metals, and to the creation of a domestic market for 
the produce of the soil, are facts, Mr. President, that cannot be 
denied. We are, however, assured, that their existence is conse- 
quent upon the deficiency of a certain something, called capital — 
that time, alone, is required for obtaining the necessary supply — 
and that, then, money will be cheap, and manufactures will be 
established. What, however, has been the direction in which we 
have moved, in the last few years ? Have we advanced, or retro- 
graded ? Has the price of money fallen since 1846 ? Has it not, 
on the contrary, greatly risen ? Is capital more easily obtainable, 
for mining, or for manufactures, than it was, ten years since ? 
Has not, on the contrary, the capital that then was so engaged, 
almost entirely disappeared ? Are our farmers less dependent on 
the distant market, than they were in 1846 ? Have they not, on 
the contrary, become greatly more dependent? — If, then, for the 
last twelve years, our movement has been retrograde, is it pro- 
bable, Mr. President, that further continuance in the line of 
policy to which that effect is due, will change the movement to 
a forward one ? Scarcely so, as it would seem. 

Capital abounds, and the price paid for the use of the instru- 
ment called money, is low, in all those communities, in which em- 
ployments have been diversified ; those, in which the consumer 
and the producer have taken their places by each other's side ; 
those, in which the tax of transportation is small ; those, in which 
agriculture is becoming a science ; those, in which the yield of 
the land steadily increases ; those, whose raw materials steadily 
rise in price ; those, consequently, whose growing wealth enables 
them to increase their supplies of the precious metals, as is the 
case with the countries of Central and Western Europe — those 
which follow in the lead of France. 

Capital is scarce, and interest is high, in all those countries 
which are dependent upon a nearly exclusive agriculture ; those 
whose markets are distant ; those which are subject to heavy tax 
for transportation; those whose agriculture consists in robbing 
the earth, and selling the soil ; those, the yield of whose land de- 
creases ; those, whose raw materials fall in price ; those, conse- 
quently, whose poverty forbids increase in the supply of the pre- 
cious metals, as is the case with Ireland, India, Portugal, Turkey, 
and all other countries which follow in the lead of England. 
8 



114 



LETTERS TO THE 



Capital being scarce among these latter, they are constantly 
assured that, under existing circumstances, it is absurd for them 
to attempt to convert their corn and their wool into cloth, or their 
coal and ore into iron. It is, however, manufactures that cause 
the growth of capital — facilitating, as they do, the development 
of the powers of the man, and thus enabling him to combine 
with his fellow-men, for economizing the power resulting from the 
consumption of capital in the form of food. 

Every act of combined action, Mr. President, has for its object, 
and its effect, a saving of human effort, which, itself, is capital. 
Sometimes, a few individuals combine to drain a piece of land ; 
at others, to dig a well, to construct a mill, or to open a mine ; 
all of which require capital ; that is to say, the investment of a 
certain amount of labor, upon the same principle, identically, 
that the farmer ploughs his land, and sows his seed — calculating 
upon having it returned, with interest for its use. When Crusoe 
made his rope-ladder, he did so for the reason, that it was better 
for him at once to expend a few hours, or, in other words, a little 
capital, than to waste, throughout the year, an hour a day, in 
climbing the rock under which he had taken up his abode. All 
the labor thus economized, was capital. 

"What," says a recent French economist — "What is the ob- 
ject, what the result, sought to be obtained by every advance of 
capital, for whatsoever purpose ? It is, everywhere and always, 
that of suppressing, by means of a certain quantity of labor once 
performed, a certain portion of current labor and annual ex- 
pense that would otherwise re-appear periodically, and for an 
indefinite period of time; it is to exonerate, at the cost of a 
momentary sacrifice, the whole future of production. 

11 Every intervention of capital has the effect of diminishing 
daily labor, resulting from the constantly recurring difficulty of 
an operation : thus, we have here a village situated at the dis- 
tance of a mile from a river — each of its people, when he has 
occasion for water, being required to walk that distance. No 
capital is expended, but there is a periodical demand for labor, 
carried to its highest point. The inhabitants, at length, conceive 
the idea of making some earthen vessels, having done which, they 
go once a day — returning with the day's supply of water. Capital 
now making its appearance in the once-performed labor of making 
the vessels, the daily expenditure of human effort is diminished, 
in the proportion that the one walk to the river, bears to the five, 
or six, that would, otherwise, have been required. 

" Next, some one constructs a cask, and a wagon — attaching to 
the latter an ass, or an ox, and carrying water about the village. 
Here is a new expenditure of capital, but, in return, there is eco- 
nomy in the daily labor — proved by the fact, that the people now 
buy their water, in place of going to get it. At length, however, 
an aqueduct is built — requiring an enormous expenditure of 



PRESIDENT OF THE UNITED STATES. 



115 



." ,pital ; but the daily effort that had been needed for obtaining a 
4apply of water is from this time at an end — capital having, so to 
4peak, altogether superseded labor. 

"The proof that all these successive interventions of capital 
have been economies of force, time, and money, is, that all these 
expenditures have been returned in the value of the water ob- 
tained ; and that, while casks, wagons, and buildings, have been 
paid for and maintained, the price of water has steadily fallen ;" 
and, as the author might well have added, the consumption has 
so much increased, that a single family now consumes more than 
would, at first, have supplied the village. 

In writing this passage, 31. de Fontenay had no reference, what- 
soever, to the question of protection — of the claims of commerce 
on the one side, or of those of trade on the other ; but, it is the 
characteristic of propositions that are true, that they, at all times, 
and everywhere, prove themselves true. The great object of man, 
Mr. President, being that of acquiring power over nature, the 
more he does so, the less is the value of the commodities he re- 
quires, the greater is his own, and the larger becomes his con- 
sumption. To attain power, there must be combination of effort. 
The obstacle to association being found in the necessity for trans- 
portation, the more it can be removed, the greater is not only the 
present power of man, but the greater his capacity for new and 
more important efforts. The spring being distant, he calls to his 
aid, in regular succession, various natural forces — passing from 
the mere hand to the jug, the cask, and the wagon, with constant 
decline in the cost and value of water. When, however, he con- 
structs an aqueduct, and is thus enabled to avail himself of the 
power of gravitation, value ceases — water becoming cheap as air. 

The Indian path being bad, he determines, once for all, to 
make a road, the effect of which is soon exhibited in the fact, 
that he is enabled, once again for all, to make a turnpike ; and 
yet, so much are his powers thereby augmented, that we find him 
again, once for all, investing millions of present labor in construct- 
ing a canal — then regarded as the neplus ultra of improvement. 
Here again, however, Mr. President, we find it to be only the 
first step that costs — the economy of labor effected by the canal 
proving so great, that but a trivial portion is required for the 
construction of a railroad, that transports himself and his mer- 
chandise at a cost so small, as to treble the reward of labor. 

The school-house being distant, his children are obliged either 
to dispense altogether with education, or to waste most of their 
time on the road thereto. Seeing himself surrounded by the ma- 
terials of which houses are composed, he proposes to his neigh- 
bors that they shall, once for all, give their labor to the construc- 
tion of a house — thereby enabling themselves to economize the 
labor of placing their children on the spot at which they are to be 



116 



LETT EES TO THE 



instructed ; and now instruction so much declines in cost, that 
ten times as many children are enabled to profit by it. 

The market being distant, he is obliged to incur, daily, the cost 
of transferring his wool and his corn, to be exchanged for cloth. 
Looking around, he sees that nature has furnished him with the 
same forces, precisely, with those in use among the distant millers. 
The fuel will give as much heat ; and the ore will make iron of equal 
strength. He therefore proposes to his neighbors, that they shall, 
once for all, unite together for building a stack through which to 
pass the ore and* the coal, the laborers in which will eat the corn 
that now they are obliged to carry to the distant market — thus 
terminating, at once and for ever, the necessity for so much trans- 
portation. 

The iron now obtained, he next, Mr. President, suggests, that 
steam can as well be made to spin and weave cotton in their own 
neighborhood, as in any other ; that stone, lumber, and lime, are 
abundant — all that is required, for economizing the daily labor 
of transportation, being, that they should, once for all, club to- 
gether for putting up a house, and for bringing from abroad a 
little machinery, and the skill required for working it. Further, 
he says to them : "We are, ourselves, unemployed for more than 
half our time, and, as regards our children, they are almost wholly 
so. Though unfit for the labors of the field, they yet could well 
perform the lighter work of tending the operations of a mill. 
Again, the minds of our people are undeveloped. Let us have 
them taught, and in a brief time — obtaining machinists of our 
own — it may be. that we shall be enabled to teach those among 
whom we now must seek for knowledge. We waste, daily, the 
powers of earth and air, for want of little machines, that would 
enable us to use them ; we waste the faculties of our people, be- 
cause there is no demand for them ; we waste their time and our 
own, for want of combination ; we waste the major part of the 
products of our land in feeding the horses and men who carry the 
rest to market — exhausting the soil, because the market for its 
products is so very distant. Let us, then, once for all, combine 
for the purpose of putting a stop to all this waste. With every 
step we make in that direction, we shall offer new inducements 
for carpenters and masons, printers and teachers, to come among 
us — eating the food, that now we are forced to carry to the dis- 
tant market; with each, the faculties of our people will become 
more and more developed — enabling us more and more to perfect 
the various processes by means of which to obtain command ovei 
steam and other natural forces. With each, there will be an in- 
crease of commerce among ourselves, attended by diminution of 
our dependence on the trader, and an increase of power to com 
mand his services in case of need. The more numerous the 
differences among ourselves, the more rapid will be the motion of 
Mie societary machine, the greater will be the economy of labor, 



PRESIDENT OF THE UNITED STATES. 



117 



the smaller will be the value of commodities, and the greater that 
of man." 

Such, Mr. President, were the objects sought to be attained by 
Colbert, to whom France was indebted for the system since so 
steadily carried out ; that, to which she owes it, that she has 
"covered herself with machinery and mills" — that "her collieries, 
her furnaces, and her workshops of every description, have grown 
to an enormous extent, and out of all proportion to what existed 
eighty years since " — that the value of her land has so immensely 
increased — that the power of the laborer to command supplies 
of food has doubled, where, even, it has not trebled — and that 
she herself is now so powerful. 

Directly the reverse of this, is the doctrine lying at the founda- 
tion of the system that would make of Britain the workshop of the 
world ; that, for the maintenance of which, we are taught that 
man begins everywhere with the richest soils — all old communi- 
ties being required to resort to poorer ones, with daily diminution 
in the demand for labor. To our farmers and planters, and to 
those of Brazil and Cuba, it says — "Cultivate your rich soils, 
and leave us to our poor ones. Labor being cheap with us, we 
can manufacture more cheaply than you can do. Do not, there- 
fore, once for all, build mills or furnaces ; continue year after 
year to expend your labors in carrying produce back and forth ; 
continue to exhaust your land ; continue to have no combination 
of effort among yourselves ; and you will grow rich. The time, 
however, will arrive, when you will be forced to cultivate the poor 
soils, and then you will be troubled with over-population. Wages 
falling, you may then be enabled to accumulate the capital required 
for entering into competition with us ; that is to say, the poorer 
you become, the greater will be your power.'' 1 

Such, Mr. President, is the doctrine of the school that is based 
upon the idea of trade being the first pursuit of man ; that, by 
help of which the system has, thus far, been carried out. It is 
one which cannot stand against the facts everywhere established, 
that man always commences with the poorer soils ; that it is only 
with the growth of the power of association and combination that 
the richer ones are brought into activity ; that, to have combina- 
tion, there must be differences of employment, tending to the de- 
velopment of the individual faculties ; and that, where such differ- 
ences are not found, the whole course of man is towards the ex- 
haustion of the land first cultivated — towards diminution in its 
value, and increase in that of all the commodities required for 
his use — and towards his enslavement, both by nature and by his 
fellow-man. Under that system it is, that Ireland wastes, weekly, 
more labor than would, if applied once for all, give her the ma- 
chinery required for enabling her to make a domestic market for 
all her food, and all her labor ; that Portugal and Turkey waste, 
daily, more muscular and intellectual power than would, if applied 



118 



LETTERS TO THE 



once for all, give them machinery for making all the cloth they 
now consume ; that Jamaica has been exhausted ; and that the 
people of India have been condemned to remain idle, when they 
would desire to be employed ; to relinquish rich soils, and retire to 
poor ones ; to abandon cities in which once lived hundreds of 
thousands of poor, but industrious and happy, men — foregoing 
all the advantages of commerce, and becoming dependent, alto 
gether, on the chances of trade. 

Following in the lead of Trance, the people of Northern Eu- 
rope, generally, have protected themselves against this system — 
the result being seen in the facts, that the prices of raw materials 
and finished commodities are there steadily approximating ; that 
gold flows rapidly in ; that the rate of interest is moderate ; that the 
circulation of society becomes from day to day more rapid ; that 
the proportion borne by fixed to floating capital is a constantly 
increasing one ; and that the power of the trader and transporter 
rapidly declines — all of these phenomena being evidences of ad- 
vancing civilization, consequent upon the determination, once for 
all, to make the investments required for bringing the consumer 
to the side of the producer, and thus relieving the former from 
the wasting tax of transportation. 

Guided, or governed, by England, Ireland, Turkey, Portugal, 
and the United States, have refused to make the effort, once for 
all, to relieve themselves from that oppressive and daily recurring 
tax — the result being seen in the facts, that the prices of raw ma- 
terials and finished products steadily recede from each other ; 
that gold flows regularly abroad ; that the rate of interest is 
high ; that circulation becomes more languid ; that the proportion 
borne by floating capital to that which is fixed is a constantly in- 
creasing one ; and that the power of the trader and transporter 
steadily increases — all of these phenomena being evidences of de- 
clining civilization. 

Food, -Mr. President, is capital. Having been consumed, it is 
still capital, in the form of the power to labor, with the body, 01 
the mind, or both. That power being exerted, it re-appears in 
the form of food or cloth — books or newspapers. Not exerted, 
it is altogether lost — labor-power being, as you have seen, the 
only commodity, that cannot be kept, even for a second. 

The power to accumulate capital exists in the direct ratio of 
the power of combination, and that itself exists in the ratio of the 
diversity of employments. That understood, there can be little 
difficulty in arriving at a proper understanding of the causes, why 
it accumulates so rapidly in Central and Northern Europe, and 
why it disappears so rapidly from Turkey and Portugal, Ireland 
and India. 

Careful study of these simple principles, Mr. President, will 
enable us readily to understand why it has been, that capital has 
always so much abounded, when we have had protection, and why 



PRESIDENT OF THE UNITED STATES. 



119 



it has so entirely disappeared, when we have had the system known 
by the title of "free trade." The one looked to economizing 
labor, which itself is, as you have seen, capital. The other looks 
to wasting labor, or capital. Under the one, as in 1833 and 1846, 
capital was readily obtainable, at moderate rates of interest, for 
any useful purpose. Under the other, as in 1822 and 1842, and 
as at the present time, it has become so scarce, as to be unattain- 
able for the construction of roads, for the building of mills, or for 
the opening of mines, at any rate of interest, however high. 

Were the tariff of 1842 this day re-enacted into law, the face 
of affairs throughout the country would be wholly changed — 
capital becoming at once abundant — the rate of interest falling — 
and labor coming into demand to such extent, that men, women, 
and children, would find all the employment they could desire ; 
and that, too, before the lapse of thirty days from the present 
hour. Why, Mr. President, would it be productive of such re- 
sults ? Because, there would at once arise, throughout the coun- 
try, a confidence, that labor was again to be economized — that 
that internal intercourse which, as you, Mr. President, have seen, 
we so greatly need, was to be obtained — that the great domestic 
market for food and labor was to be extended — and that we were 
again to become rich and strong enough to be enabled to purchase 
full supplies of the precious metals, as was the case in the protec- 
tive periods which closed in 1835 and 1847. 

What we need is confidence in the future. Let that be ob- 
tained, and capital will, from the instant, become as abundant as 
we have ever known it. Give us that, and there will exist no 
barrier to the maintenance of a specie circulation. Give us that, 
and the occasion for extending the central powers at the expense 
of the local ones, will pass away. Give us that, and our every 
future step will be towards happiness, wealth, and power, and 
towards domestic and foreign peace. Refuse that, and each suc- 
cessive step will be attended by growing misery among the peo- 
ple, and discord among the States. 

The strength of every nation, as compared with other nations, 
grows in the ratio of the growth of the power of combination 
among the people of whom it is composed. That power grows 
with the growing diversity of employments. With us, that diver- 
sity diminishes, and hence the steady decline in the respect in 
which we are held, and in the power we exercise. 

With great respect, 

Your obed't servant, 

Henry 0. Carey. 

Philadelphia, February lUh, 1858. 



120 



LETTERS TO THE 



LETTER TWENTY-FIRST. 

How is it, that protection can be needed ? Why is it, that each 
and every man is not to be free to use his products as he pleases 
— exchanging, equally freely, abroad and at home? How is it 
possible, that our people have been, or can ever be, more pros- 
perous under a protective system, than under what is called a 
"free trade" one? These, Mr. President, are important ques- 
tions — seeking replies to which, we must now turn to some of the 
pages of our Colonial history. 

In one respect, the Colonial system of England has differed from 
all others that have existed — the moving principle of its founders, 
as well as of all those who since have followed in its direction, 
having been, that of prohibiting every attempt, on the part of the 
colonists, at attaining that diversity of employments which is re- 
quired for securing competition for the purchase of their own rude 
products, or for the sale of finished commodities required in ex- 
change — and thus maintaining, at its highest point, the tax of 
transportation. Without such diversity, the power of association 
and combination could have no existence. Without it, the colo- 
nists were bound to remain, for ever, mere instruments in the 
hands of the traders and transporters of the mother-country. 
That such were really the objects sought to be accomplished, is 
shown in the following passage from the work of an influential 
writer of the last century, to which I desire now, Mr. President, 
to invite your attention : — 

" Manufactures in our American colonies should be discouraged, 
prohibited." * * " We ought always to keep a watchful eye 
over our colonies, to restrain them from setting up any of the 
manufactures which are carried on in Great Britain; and any 
such attempts should be crushed in the beginning. " * * " Our 
colonies are much in the same state as Ireland was in, when they 
began the woollen manufactory, and as their numbers increase, 
will fall upon manufactures for clothing themselves , if due care 
be not taken to find employment for them, in raising such pro- 
ductions as may enable them to furnish themselves with all the 
necessaries from us." * * "As they will have the providing 
rough materials to themselves, so shall we have the manufacturing 
of them. If encouragement be given for raising hemp, flax, &c, 
doubtless they will soon begin to manufacture, if not prevented. 
Therefore, to stop the progress of any such manufacture, it is 
proposed that no weaver have liberty to set up any looms, with- 
out first registering at an office, kept for that purpose. " * * 
" That all slitting-mills, and engines for drawing wire or weaving 
stockings, be put down." * * " That all negroes be prohi- 



PRESIDENT OF THE UNITED STATES. 



121 



bited from iveaving either linen or woollen, or spinning or 
combing of wool, or working at any manufacture of iron, further 
than making it into pig or bar iron. That they also be prohibited 
from manufacturing hats, stockings, or leather of any kind. This 
limitation will not abridge the planters of any liberty they now 
enjoy — on the contrary, it will then turn their industry to pro- 
moting and raising those rough materials." * * " If we 
examine into the circumstances of the inhabitants of our planta- 
tions, and our own, it will appear that not one-fourth of their 
product redounds to their own profit, for, out of all that comes 
here, they only carry back clothing and, other accommodations 
for their families, all of which is of the merchandise and manu- 
facture of this kingdom. " * * " All these advantages we re- 
ceive by the plantations, besides the mortgages on the planters' 
estates and the high interest they pay us, which is very consider - 
able." — (Gee on Trade, London, 1T50.) 

Turning now, Mr. President, to the statute-book, you will find 
a continued series of laws, each and every one of which had for 
its object, that of carrying out the system above described — pro- 
hibitions of manufactures, on one hand, and bounties on the im- 
port of raw materials, on the other, having been resorted to, for 
preventing the colonists from making those changes in their 
rude products, that were required for fitting them for consump- 
tion among themselves. The one great object of the system, 
was that of maintaining in its most bulky form, the commodity 
requiring to be transported, while contracting, as far as 
possible, the machinery by which the work of transportation 
aud conversion was to be effected — thereby enriching the trader 
and transporter at the cost of both consumer and producer. The 
more perfectly it could be carried out, the greater would be the 
difference between the prices of raw materials and finished com- 
modities — the greater would be the tendency towards exhaustion 
of the soil and ruin of its cultivators — the more would the people 
become dispersed — the heavier would become the tax of trans- 
portation, and the more entirely would it be thrown upon the 
colonists, who were thus to be impoverished, for the benefit of 
those by whom the laws were made. 

To the grinding taxation of a system which, thus, looked to the 
establishment of a monopoly of the power to purchase the rude 
products of the earth, and to sell the commodities into which they 
became converted, and not to a paltry tax on tea, Mr. President, 
are we indebted for the Declaration of our Independence, and the 
»v*ar which followed it. To a desire for rendering that declaration 
effective, by protecting our farmers and planters against the sys- 
tem, was largely due the calling of the Convention which gave us 
our Constitution — a very brief experience having sufficed to satisfy 
the various States, and Virginia most especially, that concert of 
action for resistance to it, was essential to the advance of the 



122 



LETTERS TO THE 



Union in wealth and power. To the knowledge of its action 
acquired in, or derived from, colonial times, it was due, that each 
and every of our Presidents, from Washington to Jackson, held, 
that it was not only the right, but the duty, of Congress, so to 
direct the power with which it was clothed, as to promote the 
approximation of the producer and the consumer, and thus te 
diminish the enormous taxes of trade and transportation, by means 
of which, the farmers and planters had been so much impoverished 
— to produce competition for the purchase of raw produce, and 
for the sale of finished commodities, and thus secure to the agri- 
cultural interest that freedom of commerce which is denied to him 
who must make his exchanges at the single mill ; and in this 
manner, to carry into practical effect, that independence whose 
existence had been declared in 1776. 

Such, Mr. President, were the general tendencies of the country, 
during the half century which followed the peace of 1*783 — a pe- 
riod remarkable beyond any other recorded in the history of 
modern Europe, for commercial disturbance ; one, in which piracy 
on the ocean — sanctioned by French decrees and British Orders in 
Council — embargoes, non-intercourse acts, and wars with both 
France and England, combined for the production of financial 
derangement ; and yet, that one in our history which stands dis- 
tinguished by the fact, that poor as we then were, our banks were 
never, in*time of peace, driven to suspension ; nor were either the 
people, or the government, driven to the disgraceful necessity of 
resorting to the use of irredeemable paper, as the only means of 
maintaining the societary circulation. 

Five-and-twenty years have since elapsed, and during nearly all 
that period, the doctrines of our revolutionary fathers, as regarded 
commercial policy, have been repudiated — the essential duty of 
the central government having been held to be, that of providing 
for itself, careless of the effect of its measures upon the condition 
of the people. So far as was required for their taxation, tariffs 
might, as we have been assured, be tolerated ; but so far as re- 
quired for their protection, they could not — free trade, as it has 
been called, having been the order of the day. 

In what, however, Mr. President, does our present freedom of 
trade consist ? Is the planter free to exchange his cotton, abroad 
or at home, at his pleasure ? Is there that growing competition 
for his products, which tends to raise their prices ? That, there 
certainly is not — nearly all our mills being closed, and he being 
reduced to dependence on distant markets, such as he has not 
known since the disastrous times of 1842. — Are our farmers free 
to exchange their food, abroad or at home, for iron with which 
to make their roads ? Is there a growing competition for the 
purchase of food, and the sale of iron ? Certainly not — our fur- 
naces and rolling-mills being closed — the men who wrought in 
them, turned adrift — and the necessity for going to the distant 



PRESIDENT OF THE UNITED STATES. 123 



markets with wheat and corn, being greater now, than it has been 
since 1842. — Are our workingrnen free to sell their labor when 
and where they please ? Do they find increase of competition for 
the purchase of the single commodity they have to sell ? Assuredly 
not — there being ten who have labor for sale, to every one who 
is seeking to purchase it. — Look where you may, Mr. President, 
you will find a diminution of competition for the purchase of labor 
and the rude products of the land, the commodities we have to 
sell — the laborer, the farmer, and the planter, becoming, from 
hour to hour, more and more, mere instruments to be used by the 
trader and transporter ; and, for the simple reason, that it has been 
held by your recent predecessors in the Presidential chair, that the 
central government had only itself, and not the people, to protect. 
Widely different from this, Mr. President, were the ideas of Wash- 
ington and Hamilton, Adams and Jefferson, as to the rights and 
duties of that government. 

Freedom of commerce among ourselves — the commerce between 
our towns, cities, and States, which, as you have so ably shown, 
is the sort of free trade we need — has no existence. The farmers 
of Illinois exchange between themselves, by means of the furnaces 
of Wales and Scotland. The Iowa farmer can make no exchange 
with the Mississippi planter, until after the corn and cotton have 
travelled to Manchester, there to be converted into cloth to be 
returned to Iowa and Mississippi — eighty-five per cent, of the 
corn and cotton being taken on the road, for the support of the 
people by whom the exchanges are effected. Why this is so — 
why our farmers and planters are thus subjected to a tax of trans- 
portation, compared with which, that of France and Germany is 
as nothing — you will, Mr. President, readily understand, after hav- 
ing read the following passage, extracted from a document pub- 
lished but four years since, by order of the British House of Com- 
mons : — 

" The laboring classes generally, in the manufacturing districts 
of this country, and especially in the iron and coal districts, are 
very little aware of the extent to which they are often indebted 
for their being employed at all to the immense losses which their 
employers voluntarily incur in bad times, in order to destroy 
foreign competition, and to gain and keep possessioji of foreign 
■narkets. Authentic instances are well known of employers hav- 
ng in such times carried on their works at a loss amounting in 
he aggregate to three or four hundred thousand pounds in the 
'ourse of three or four years. If the efforts of those who encou- 
age the combinations to restrict the amount of labor and to pro- 
luce strikes were to be successful for any length of time, the great 
ccumulations of capital could no longer be made which enable a 
%w of the most wealthy capitalists to overwhelm all foreign 
ompetition in times of great depression, and thus to clear the 
ay for the whole trade to step in when prices revive, and tc 



124 



LETTERS TO THE 



carr) on a great business before foreign capital can again accu- 
mulate to such an extent as to be able to establish a competition 
in prices with any chance of success. The large capitals of this 
country are the great instruments of warfare against the com- 
peting capital of foreign countries, and are the most essential 
instruments now remaining by which our manufacturing supremacy 
can be maintained; the other elements — cheap labor, abundance 
of raw materials, means of communication, and skilled labor — 
being rapidly in process of being equalized." 

The system here described is very properly characterized as 
"warfare;" and we may properly inquire for what purposes, and 
against whom, it is waged. It is a war, as you see, Mr. President, 
for cheapening all the commodities we have to sell, labor and raw 
materials — being precisely the objects sought to be accomplished 
by the " Mercantile System," whose error was so well exposed in 
the Wealth of Nations. It is a war for compelling the people of 
other lands to confine themselves to agriculture — for preventing 
the diversification of employments in other countries — for retard- 
ing the development of intellect — for palsying every movement, 
elsewhere, looking to the utilization of the metallic treasures of the 
earth — for increasing the difficulty of obtaining iron — for dimin- 
ishing the demand for labor — for doing all these things at home 
and abroad — and for thus subjecting the farmers and planters of 
the world to the domination of the manufacturers of Britain. 

To measures such as here described, was due the closing of all 
the factories of India, followed by the exportation of cotton to 
England, there to compete with the products of Carolina and Ala- 
bama. The more perfectly the system can be carried out — the 
more the manufacture can be restricted to England — the cheaper 
must be raw materials ; but the greater must be the export of 
cheap labor to Texas and to the Mauritius, there to raise more 
cotton, sugar, and other rude products ; and thence to compete 
with each other for the reduction of prices, and for the more com- 
plete enslavement of the laborers of all those countries. 

In the case of a war like this, what, Mr. President, does a 
government owe to its people and itself? The answer to this 
question is furnished by one of the most distinguished of your pre- 
decessors, Mr. Madison, in the following words : — 

" Should it happen, as has been suspected, to be an object, 
though not of a foreign government itself, of its great manufac- 
turing capitalists, to strangle in the cradle the infant manufactures 
of an extensive customer, or an anticipated rival, it would surely, 
in such a case, be incumbent on the suffering party so far to make 
an exception to the 'let-alone' policy as to parry the evil by op- 
posite regulations of its foreign commerce." 

That such is the duty of a government, no one can seriously 
doubt ; and yet, that duty has remained unperformed. Time 
after time, for the last half century, have the iron, the cotton, and 



PRESIDENT OF THE UNITED STATES. 



125 



the woollen manufactures, been stricken down by means of mea- 
sures such as here are indicated, without the slightest attempts at 
interference on the part of the central government. Crisis has 
succeeded crisis, and with each successive one, the necessity for 
the export of raw materials has increased, with steady decline of 
prices, and as steadily increasing necessity for the export of the 
precious metals to discharge the balance of trade, thus forced 
upon our people. Hence, Mr. President, the difficulty of main- 
taining a stable currency. Hence the ruinous rate of interest. 
Hence the disasters among our merchants and our banks. Hence 
the decline in the character of our ships. Hence our inability to 
compete with the world in the use of steam for ocean-navigation. 
Hence the decline of morals ; and, hence the discord now prevail- 
ing between the different sections of the Union. 

Allow me now, Mr. President, to ask you to read, once more, 
the extract with which this letter was commenced, and study care- 
fully what were the objects sought to be accomplished by the dis- 
tant masters by whom the provinces then were ruled. Doing this, 
you will see, that they were those of limiting the colonists to the 
single pursuit of scratching the soil, and thus destroying competi- 
tion for the purchase of their products. Turning, next, to the ac- 
tion of the Federal government, you can scarcely fail to remark, 
how identical with the views of the British traders of colonial 
times, have been its acts. 

There, be assured, lies all the difficulty, and not with the local 
governments. Clothed with the power to protect our people, it 
has failed in the performance of its duties — leaving them exposed 
to a warfare of the most destructive kind, and to a taxation for 
the support of foreign governments and peoples, compared with 
which, the amount that would be required for the support of the 
largest fleets and armies, sinks into insignificance. As a conse- 
quence of this, we are rapidly passing into a state of dependence 
more complete than that which existed in 1*7^6. Further proof 
of this, I propose to furnish in another letter, remaining mean- 
while, 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, February Vdth, 1858. 



126 



LETTERS TO THE 



LETTER TWENTY-SECOND. 



The system described in my last letter, Mr. President, is, as you 
have seen, a war upon the agricultural communities of the world, 
for the reduction of the prices of their rude products. To what 
extent, it has resulted in reducing the prices of our staples, you 
have already seen, How it taxes the planters and farmers every- 
where, I propose now to show, and with that view, will commence 
by asking your attention to the following comparative view of the 
exports from Great Britain at the close of the great European 
war, and at the opening of the gold-trade of California : — 

1815. 1851. 

Export of woollens £9,381,426 £10,314,000 

cottons 20.620,000 30,078,000 

" silks 622,118 1,329,000 

linens 1,777,563 5,048,000 

And of other commodities 19,231,684 21,723,569 



Total £51,632,791 £68,492,569 

Nearly the whole increase that had taken place, in the long 
period of thirty-six years, was thus found in four branches of 
manufacture, the materials of which were wholly drawn from 
abroad, as is shown in the following statement of imports for 
that year : — 

Wool 83,000,000 lbs. 

Cotton 700,000,000 " 

Silk 5,020,000 " 

Flax 135,000,000 " 

Eggs 115,000,000 No. 

Oxen, cows, calves, sheep, hogs, &c 300,000 " 

Corn 8,147,675 qrs. 

Flour 5,384,752 cwt. 

Potatoes 635,000 " 

Provisions 450,000 " 

Butter , 354,000 " 

Cheese 338,000 " 

Hams and lard 130,000 " 

Rice 450,000 " 

Spirits , 2,000,000 galls. 

Before proceeding to examine the figures above presented, I 
desire, Mr. President, to invite your attention to the idea, that 
those who furnish the food, clothing, and lodging, do, in fact, 
furnish the power. A locomotive engine is merely the instrument 
by means of which, the force yielded by the consumption of fuel is 
made to serve the purposes of man. So it is with men. Their 



PRESIDENT OF THE UNITED STATES. 



127 



daily power to labor results from their daily consumption of food ; 
and therefore is it, that those who supply the food and clothing, 
are really the parties who supply the power that is used. That 
understood, we may now inquire how many of the people of Eng- 
land are fed by the agricultural nations of the world, preparatory 
to an inquiry into the number there employed, in doing their work. 

Divided among four millions of persons, the articles of food 
included in the above, would give to each about 

1100 pounds of corn, 
150 " flour, 
12 " fresh meat, 
1G " salted " 
18 " potatoes, 
20 " butter and cheese 
12 " rice, 
28 eggs, and half a gallon of spirits. 

This being much more than the average consumption of the 
men, women, and children, employed in the workshops of Great 
Britain, it may fairly be assumed, that the world furnishes four 
millions of laborers with food and clothing, and with shelter, 
too — the chief part of the timber these consumed, being drawn 
from abroad. 

To the stock of food above given, we have now to add, the 
total quantity of cotfee and tea, of cocoa and sugar, of lemons 
and oranges, of figs and raisins, of spices and tobacco, consumed 
by the whole eight-aud-twenty millions of the population of the 
United Kingdom. 

Of raw materials, foreign nations supply all the cotton and silk, 
all the oil, all the saltpetre, and all the dye-stuffs; of hides, wool, 
flax, hemp, and various other articles, they not only furnish all 
that is re-exported in the shape of manufactures, but as much 
more as is adequate to meet the demands of a large portion, if 
not even of the whole, of the four millions above referred to — 
who may, therefore, be considered as being fed, clothed, lodged, 
and supplied to the Euglish people, by the other communities of 
the world. 

The whole number of persons, old and young, male and female, 
employed, in 1841, in the — 

Cotton, hose, lace, wool, worsted, silk, flax, and linen manufac- 
tures of Great Britain, was 800,246 

In the mines e 193,825 

tn the working of metals, as smelters, founders, blacksmiths, 
nail-makers, brass-founders, cutlers, pin and needle makers, 
file and lock makers — thus embracing all the persons con- 
nected with the conversion of ores into metals, and metals 
into instruments, whether for the use of the farmer or the 
manufacturer, the builder of houses or the maker of cloth 
— was 303,368 



Making a grand total of 1,297,439 



128 



LETTERS TO THE 



The number so employed in 1851 must have been greater, and 
may perhaps be properly estimated at 1,500,000. " If so, it fol- 
lows, that the people of the world feed, clothe, and shelter, and 
thus furnish the labor of, nearly three times as many persons as 
are, in England, employed in mining her coal and her iron ; in 
smelting her ores, and making her pig, bar, and railroad iron ; in 
constructing her machinery of every description ; and in convert- 
ing iron, copper, brass, cotton, wool, silk, hemp, and flax, into the 
commodities required for consumption. Thus, in addition to 
famishing nearly all the raw materials, they supply all the labor ; 
and, further, they supply food, cloth, and lodging, for two and 
a half millions of persons otherwise employed. 

Of the million and a half, there is, however, but a small pro- 
portion that is employed in working for the foreigners who sup- 
ply this food, and these raw materials. Of the commodities 
exported, nearly all are of the coarser kinds, requiring very little 
of either skill or taste for their preparation. Thus, for instance, 
out of an export of £8^,000,000 sterling in 1854, nearly 
£15,000,000 consisted of metals in almost their rudest state — 
having given occasion to the exertion of very little more than brute 
force. Coals constituted.£l,500,000 ; while mere yarns amounted 
to £10,000,000. Cotton cloths, averaging only S^d., or ? cents, 
per yard, were nearly £24,000,000. Linens, averaging 8d. a 
yard, made more than £4,000,000 ; while earthenware, alkali, 
beer and ale, butter, candles, cordage, fish, salt, and wool, con- 
tributed £5,000,000 towards the mass. The difference between 
the pictures presented by the French and English exports is most 
remarkable — the former exhibiting scarcely anything that has 
not been very highly elaborated — and the latter furnishing 
evidence, that, of all the vast quantity of commodities received 
from the world, those returned have undergone that lowest amount 
of preparation required for their reception among an inferior po- 
pulation. With the exception of machinery and millwork to an 
amount less than £2,000,000, and hardware and cutlery to about 
double that sum, there is scarcely any thing in the list of English 
exports requiring either taste or skill. Seeing that such is the 
fact, it may well be doubted if more than one-fourth of the labor 
given to manufactures — or that of four hundred thousand hands 
— is applied to the conversion of the raw materials exported; 
but, to avoid the possibility of error, we may assume it to be even 
as high as one-third = five hundred thousand persons — being 
one for every eight whose labor is, as has above been shown, fur- 
nished by the agricultural nations which find themselves compelled 
to look to Britain for a market. 

The account between that country and the world at large would 
now appear to stand as follows : — 



PRESIDENT OF THE UNITED STATES. 



129 



GREAT BRITAIN. 



Dr. 



To the labor of four millions of per- 
sons there employed, while fed, 
clothed, and lodged, by other na- 
tions. 

To the sugar, tea, coffee, tobacco, 
fruit, and other commodities, re- 
quired for the consumption of 
twenty-eight millions of persons. 

To the cotton, flax, silk, hemp, lum- 
ber, and other raw materials, re- 
quired for domestic consumption, 
and for exportation. 



By the labor of half a million of per- 
sons — men, women, and children — 
employed in the lowest order of the 
labors of conversion. 



By a small portion of the raw mate- 
rials supplied. 



Having studied the extraordinary picture that is here presented, 
I will now beg of you, Mr. President, to look once more to 
Mr. Gee's sketch of the Colonial system, given in my last, there 
to find the assertion that "not one-fourth part" of the products 
of the laborers of British colonies " redounds to their own profit" 
— they obtaining in return, nothing but "clothing and accommo- 
dation for their families," and being brought, thereby, so much in 
debt, as to be compelled to mortgage their estates, and to pay 
high interest to the mortgagees. That done, I have next to re- 
quest, that you will look to the following sketch of the movement 
of the cotton trade, with a view to the determination of the ques- 
tion, whether, under the existing policy of the country, we are, 
or are not, with each successive year, becoming more completely 
subject to the Colonial system : — 

Forty years since, the cotton imported into England amounted 
to 96,000,000 of pounds ; and it commanded then 20jcZ. per pound 
— equal to £8,200,000.* 

About thirty years later, the movement of the trade, according 
to the same authority, was as follows : — 

Raw material, 500,000,000 pounds, at 5d. per pound £10,000,000 

Wages of 542,000 spinners, weavers, bleachers, &c, at £24 a 

year each 13,000,000 

Wages of 80,000 engineers, machine-makers, smiths, masons, 

joiners, &c, at £50 a year each 4,000,000 

Profits of the manufacturers, wages of superintendents, sums to 

purchase the materials of machinery, coals, &c 9,000,000 

£36,000,000 

We see, here, that while the raw material consumed was more 
than five times as great, the selling price in England was less 
than 25 per cent, greater. When, however, we reflect that with 
every stage of this increase, it had been necessary, because of the 
unceasing exhaustion of the land in cultivation, to resort to new 



*McCulloch: Commercial Dictionary ; article, Cotton. 

9 



130 



LETTEKS TO THE 



and more distant lands, with constant increase in the cost of trans- 
portation — and when we deduct the domestic charge thus created, 
together with the freights, storages, brokerages, and other claims, 
upon this immense quantity — we find that these 500,000,000 
pounds could have yielded their producers, of the various parts 
of the world, not more than £5,000,000 ; or less than, thirty years 
before, had been received by the producers of 96,000,000; and 
less, too, than was required to pay for the damage done to the 
land — leaving altogether out of view the cost of cultivation.* 

The £5,000,000 thus paid for the use of so many millions of 
acres, became £36,000,000 before they left the factory; and yet, 
as we have seen, the changes effected in them were such as re- 
quired only the lowest species of skill. Thence, they passed out 
to Turkey and India, Ireland and Portugal, Jamaica and Spain, 
the United States and Canada ; and before they reached the con- 
sumers they had become not less than £60,000,000 ; about one- 
twelfth,of which went to the cotton-grower, while the other eleven- 
twelfths were absorbed on the road between those who raised the 
wool, and those who wore the cloth — giving support to thousands, 
and tens of thousands, of men employed in blocking the wheels of 
commerce. The consequences of this are seen, Mr. President, in 
the facts, that the planter — important as is his commodity — can 
nowhere obtain proper machinery of cultivation ; that his lands 
are everywhere being exhausted ; and that slavery becomes from 



* "Few crops," says a Southern journal, "are more exhausting to the 
soil than is the cotton crop. An immense amount of manure, usually con- 
sisting, for the most part, of decayed leaves, limbs, and forest mould, is 
required to keep the land of a cotton plantation in good condition. Another 
difficulty is, that cotton requires later cultivation than any other crop, leav- 
ing the planter but little time to enrich or improve his farm as he may 
desire. An Alabama planter says, that cotton has destroyed more than 
earthquakes, or volcanic eruptions. Witness the red hills of Georgia and 
South Carolina, which have produced cotton till the last dying gasp of the 
soil forbade any further attempt at cultivation; and the land, turned out to 
nature, reminds the traveller, as he views the dilapidated condition of the 
country, of the ruins of ancient Greece." 

The effects of this, as exhibited in South Carolina, are thus stated in a 
recent address issued by the Agricultural Convention recently held in that 
State : — 

"Your committee would earnestly bring to the attention of this convention 
the mournful fact, that the interest heretofore taken by our citizens in agri- 
cultural improvement has become stationary ; that our old fields are enlarg- 
ing; our homesteads have been decreasing fearfully in number; and our 
energetic sons are annually seeking the rich and fertile lands of the South- 
west, upon which they imagine that treble the amount of profits can be 
made upon capital than upon our own soils. Nor is this all. We are not 
only losing some of our most energetic and useful citizens, to supply the 
bone and sinew of other States, but we are losing our slave population, which 
is the true wealth of the State. Our stocks of hogs, horses, mules, and 
cattle, are diminishing in size and decreasing in number, and our purses are 
being strained for their last cent to supply their places from the Northwest- 
ern States." 



PRESIDENT OF THE UNITED STATES. 



131 



year to year more and more the lot of the laborers of all cotton- 
producing countries. Such are the necessary results of the system 
that looks to cheapening- the raw materials of manufacture, and to 
increasing the difference between their price and that of the fin- 
ished commodities into which they are converted. 

Eleven-twelfths, or fifty-five millions of pounds, are divided 
among middlemen — and of this enormous sura four-fifths, pro- 
bably, centre in the owners of English ships, mills, and other 
machinery of exchange and transportation. To pay this, it is 
required, that the agricultural nations send to England enormous 
quantities of tea, coffee, sugar, indigo, and other commodities — 
while themselves wasting, daily, more labor than is employed, 
monthly, in all the mines and factories of the United Kingdom. 
Hence their inability to obtain improved machinery ; and hence 
the necessity they are everywhere under, of confining themselves 
to the work of scratching out, and selling, the soil. 

The direct effect of the reduction in the price of cotton has 
been, and is, that of forcing labor into the production of sugar, 
with similar effect — enabling the people of England to obtain 
three pounds for the price they before had paid for one, but ruin- 
ing the people of Jamaica. The decline in the price of sugar 
forced labor into the production of coffee, and that, in its turn, 
fell in price — there being a solidarity o f interest — of prosperity, 
or of adversity — among all the agriculturists of the world. Our 
farmers and those of Russia and Germany were injured by the 
stoppage of manufactures in Ireland, because it had the effect of 
diminishing the Irish consumption of food, and forcing large quan- 
tities on the English market. The planters were injured by it, 
because it not only stopped the consumption of cotton among the 
Irish people themselves, but — by forcing large quantities of labor 
upon England — it lessened the power of the English laborer to 
consume either food or cotton. That all communities prosper by 
the prosperity of all others, and that all suffer from injury received 
by others, is a truth that will, Mr. President, at some day, come 
to be admitted ; and when it shall be so, the farmers and planters 
of the world will be found combining together to compel the 
maintenance, in the conduct of public affairs, of a sound morality 
— looking to the advancement of the interests of commerce, and 
to their own emancipation from the tyranny of trade. 

So, too, is it with the laborers of the world. Whatever tends 
to impair the condition of those of India is injurious to those of 
France and England ; and therefore it is, that those nations would 
find it profitable to carry out in their international relations the 
same morality that is required between man and his fellow-man. 
The low prices of sugar and cotton, and consequent slavery of 
the producers of those commodities, are but consequences of the 
system that has so much tended towards the enslavement of the 
workers in iron and cotton — that one which has sought the anni- 



132 



LETTERS TO THE 



hilation of the power of association and combination everywhere 
outside of Britain. 

What, Mr. President, is it, that the British manufacturers de- 
sire ? What is the object of the "warfare " that, as we are told 
by the highest British authorities, is now carried on against the 
agricultural nations of the world ? — Is it not, that of cheapening 
raw materials, while maintaining at their highest, the prices of fin- 
ished commodities ? That such is the case, cannot be denied. 

What is it, on the other hand, that our farmers and planters 
desire ? Is it not the reverse of this ? Do they not wish to have 
raw products dear, and finished commodities cheap ? That they 
do so, is certainly true. 

What is the policy, Mr. President, advocated by the foreign 
manufacturer ? Is it not that one, which is commonly called free 
trade? It is so, certainly. In advocating it, does he desire to 
carry out his own views, or those of the planter ? Does he desire 
to raise the price of food and cotton ? Does he not, on the con- 
trary, desire to cheapen both ? Does he desire to tax himself, for 
maintaining the millions of tons of shipping required for carrying 
enormous masses of raw products to the ports of Britain ? Does 
he not, on the contrary, wish to throw upon the producers all the 
cost of transportation ? Does he not know, and feel too, that, 
under that system, they receive the most trivial share of their pro- 
ducts — the remainder being absorbed by traders, transporters, 
brokers, and middlemen of all descriptions; and is it not for these 
reasons, that he urges upon the world the adoption of the free-trade 
system ? That it is so, is unquestionably true. 

The objects of the two parties being thus so widely different, is 
it possible that both can be attained by the pursuit of any one set 
of measures ? Can the system invented for the purpose of depress- 
ing the prices of raw products raise them ? Can that which looks 
to maintaining the prices of finished products, lower them ? It 
cannot ; and yet, every measure of our central government, in re- 
gard to trade, for the last twelve years, has had the fullest appro- 
bation of the advocates of that system. Could we desire better 
evidence, that those measures are hostile to the interests of both 
farmer and planter ? 

The more, Mr. President, that you shall study the subject, the 
more will you be satisfied, that to the policy of that government 
is due the depression in the prices of all our products, to which 
your attention has been called ; and that, it is to its errors, and 
not to excess in the amount of power retained by the States, when 
they adopted the Constitution, we owe the monetary difficulties 
you have so well described. 

Yours, very respectfully, 

Henry C. Carey. 

Philadelphia, February 23d, 1858. 



PRESIDENT OF THE UNITED STATES. 



133 



LETTER TWENTY-THIRD. 

Two systems, Mr. President, are before the world — one, whose 
objects are to be promoted by increasing the competition for 
the sale of all the raw materials of manufacture, labor included ; 
another, which looks to increasing the competition for their pur- 
chase. 

The first, tends towards maintaining, and even augmenting, the 
necessity for machinery for transportation — thus increasing the 
influence of the trader. The second, would promote the growth 
of the power of combination, and thus diminish the necessity for 
such machinery — while enlarging the field of commerce. 

The first, looks to widening the space by which the producer 
and the consumer are separated ; the second, to its contraction. 

The one, would increase the difference between the prices of 
raw materials and finished commodities ; the other, would secure 
their more close approximation. 

The one, looks to increasing the proportion of mental and phy- 
sical power given to trade and transportation, and thus diminish- 
ing that which might be applied to production ; the other, to an 
increase in the proportion given to production, and a diminution 
in that applied to effecting changes in the places of the things 
produced. 

The one, was reprobated by Adam Smith ; the other, is in full 
accordance with his doctrines, as well as with those of Colbert, 
the most distinguished of all the sons of France. 

Leader in the advocacy of the first has been, and is, Great Bri- 
tain. Leader in the establishment of the secon#, and most con- 
sistent in its maintenance, is France ; and thus, after so many 
ages of almost ceaseless efforts to do each other injury, by means 
of warlike operations, are these two nations now engaged in a 
peaceful contest for the leadership of the world ; but, peaceful as 
it is, it is destined to exert an amount of influence, compared 
with which that resulting from the movements of fleets and armies 
in the past, will prove to have been entirely insignificant. 

For centuries, both have been almost unceasingly engaged in 
war, but widely different have been the objects sought to be at- 
tained — France having fought for glory and dominion, while 
England has looked with a single eye to the establishment of the 
supremacy of trade. Equally different have been their respective 
policies — France having imitated Rome, who, universal plun- 
derer as she was, left the local arrangements of her provinces un- 
touched ; while Great Britain has imitated Holland, in seeking to 
monopolize the machinery of trade and transportation, and thereby 
compelling strangers to make their exchanges in her single market. 



/ 



134 LETTERS TO THE 

The policy of the one has been that of the soldier ; that of the 
other has had for its foundation, the single idea of "buying in the 
cheapest, and selling in the dearest market." 

Colbert wished that French colonists should refine their own 
sugar and make their own cloth. England, on the contrary — 
desiring that the " mischievous practice " might be prevented — 
inserted in her grants of land, clauses " declaring the same to be 
void," should the grantee "apply himself to the making of wool- 
len, or such like, manufactures." Seeking the enlargement of 
commerce, France, under the lead of Turgot, abolished the mono- 
polies of earlier times ; while, at the same moment, the Parliament 
of England — looking always towards trade — was adding, year 
after year, to the restrictions upon the movements of her artisans, 
and thus creating a monopoly to be held against the world. 

The system of the one, is based upon the idea of cheapening the 
raw produce of the earth, and the labor of him by whom it is tilled. 
The other, seeks to protect the laborer, by bringing the market to 
his door, and thus giving value to his land. 

The closer the approximation of the price of the raw material 
and the manufactured commodity, the smaller, necessarily, is the 
proportion of the product of labor appropriated to the payment 
of the transporter, the trader, the soldier, and all others of those 
classes standing between the men who labor to produce, and those 
who need to consume the things produced. The closer that ap- 
proximation, the more rapid will be the circulation, the more 
instant the demand for labor and its products, and the greater the 
power to apply the faculties of mind and body to the work of con- 
version — while giving a constantly increasing proportion to the 
labor of developing the riches of the earth, and thus augmenting 
the quantity of things susceptible" of being converted. In France, 
the quantity of food has increased twice more rapidly than the 
population ; and yet, her manufacturing industry has attained such 
large dimensions, that its product is given at 4,000,000,000 of 
francs, or nearly $800,000,000 * —being, probably, twice the 
amount of the total yield of land and labor, a century since. The 
movement, too, is a constantly accelerated one. Forty years since, 
France absorbed but 60,000 bales of cotton ; now, she requires 
400,000. Then, the whole value of the silks manufactured, but 
little exceeded 100,000,000 of francs ; now, it exceeds 400,000,000. 
Then, she made but little iron ; now, she makes more than 500,000 
tons — being as much as was produced in Britain, thirty years since. 
Then, her mines yielded but 800,000 tons of coal ; now, the quan- 
tity exceeds 5,000,000 — having sextupled in that brief period. 



* This sum has reference to the additional value given to raw products by 
che processes of manufacture, and is not to be understood as including that 
of the materials themselves. The total amount of commodities manufactured 
is given at 8,000,000,000 of francs. 



PRESIDENT OF THE UNITED STATES. 



135 



These arc great changes; and yet, so far are they from having 
oeen attended with diminution in the proportion of physical and 
mental faculty given to agriculture, that they are the cause of a 
constant increase therein. 

A century since, France could have fed with wheat seven mil- 
lions of people. Now, she could feed more than twenty millions.* 
Then, the corn, potatoes, and other vegetables, if equally divided 
among the population, would have given about 800 pints per head. 
Now, it would give more than twice that quantity ; and of the 
change thus manifested, by far the larger portion has occurred in 
the forty years through which we last have passed. This, Mr. 
President, is a great change, and yet it is but a part of what has 
been effected. The policy of Colbert, in seeking to diversify the 
modes of agricultural employment, having been carried out in 
reference to sugar, the result is seen in the fact, that France has 
now more than a hundred thousand acres devoted to the culture 
of the beet-root — producing sugar to the amount of sixty or 
seventy millions of francs, equal to twelve or fourteen millions of 
dollars ; and so cheaply is it supplied, that the sugar of the colo- 
nies finds itself forced to implore protection against the domestic 
manufacture. 

In 1812, the total amount of silk cocoons produced but little 
exceeded 5,000,000 kilogrammes ; now, it exceeds 15,000,000, 
with a value of more than sixty millions of francs, or twelve mil- 
lions of dollars. 

France has now 32,000,000 of sheep, against 27,000,000 in 
1813, and 20,000,000 in 1789; but the improvement in quality 
has been far greater than that in quantity — the demand from the 
constantly growiug woollen manufacture, having offered a large 
bounty upon the devotion of time, mind, and means, to the im- 
provement of the race. 

Cloth has steadily declined in price, while wool has much 
advanced ; and the corn that, a century since, would command but 
twelve and a half francs, was worth nineteen francs in the deceminal 
period ending in 1840. The prices of the raw material and of 
the finished commodity are steadily approximating each other — 
thus affording the strongest evidence of advance in civilization. 
The consequences of the increase of quantity, and of price, are 
seen in the fact that whereas, eighty years since, the average 
money-value of the produce of an acre of land was 87^ francs, it 
has since risen to no less than 237 — having almost trebled. 

We see, thus, Mr. President, that much of the augmented 
money-value results from increase in quantity, and most especially 
from increase in those bulky products of the earth, that "will not 



* That the change here indicated is still in rapid progress, is shown by 
the fact that while the average product of wheat in the years 1842-1848 was 
only 72,000,000 hectolitres, that of 1847-1851 was no less than 86,000,000. 



136 



LETTERS TO THE 



bear transportation to distant markets. A farther portion of it 
is consequent upon the increased utility of many portions of the 
produce, resulting from the existence of a market near at hand. 
Thus, the wheat-straw, alone, is valued at 393,000,000 of francs, 
or nearly $80,000,000 ; and the total value of the straw of France 
at 761,000,000 of francs = $150, 000,000 — being more than the 
total value of the cotton crop of the United States, which occu- 
pies so nearly exclusively the land of no less than ten of our 
States, and furnishes almost the whole employment of so many 
millions of people. 

As a general rule, France feeds herself. In thirty-three years 
it occurred once — in 1841 — that her imports of food were ade- 
quate to the supply of 2,100,000 persons. Twice — in 1832 and 
1846 — she imported half that quantity. Six times, her imports 
sufficed for the feeding of from three to four hundred thousand 
persons ; but in nineteen of the thirty-three years her imports were 
insignificant. 

The annual average of her exports, in the ten years ending 
1836, but little exceeded 500,000,000 of francs. In 1852, the 
amount was 1,250,000,000 — being an augmentation of 150 per 
cent. ; while the average of the previous five years, including 
those disastrous ones of 1848 and 7 49, exceeded 1,000,000,000; 
and yet, large as was the increase, nearly the whole amount of 
labor thus exported, directly represented food produced on the 
soil of France. How small is the quantity of foreign raw mate- 
rial that goes to the production of the goods exported, is shown 
by the fact, that while the value of cotton fabrics exported in 1854 
was 60,000,000 of francs, the weight was only 7,300,000 kilo- 
grammes, or 16,000,000 of pounds — giving an average of seventy- 
five cents for the raw cotton that had passed into the hands of 
the manufacturer at an average price, not exceeding ten. The 
total weight of clothing and furniture exported in 1856 was under 
40,000 tons — a quantity that, as you have seen, Mr. President, 
could be carried in forty ships of very moderate size ; and yet, in 
that small bulk was contained little less than two hundred millions 
of dollars' worth of French food, so condensed, in accordance with 
the ideas of Adam Smith, as to enable it freely to travel to the 
remotest corners of the world. 

The tendency of French policy is that of making manufactures 
subsidiary to agriculture — combining a small amount of foreign 
raw materials with a large quantity of domestic ones, and thus 
enabling her farmers cheaply to maintain commerce with distant 
countries. Scarcely any thing passes out until it has attained a 
form so high, as to cause the skill and taste, which represent her 
food, to bear a very large proportion to the value of the raw 
material that is used. Her exports of raw produce are insignifi- 
cant in amount ; and even of wine, the amount exported but little 
exceeds that of the years immediately preceding the Revolution— . 



PRESIDENT OF THE UNITED STATES. 



137 



the average from 1844 to 1846 having been only 1,401,800 hecto- 
litres, against 1,247,700 tons from 1787 to 1789. 

The total value of French produce and manufactures exported 
in 1856 was 1,893,000,000 francs, or $370,000,000; and of this 
large sum, the foreign raw materials could scarcely much have ex- 
ceeded, even if they equalled, a fifth — leaving 1,500,000,000 
of francs as the actual value of food and other domestic products 
furnished to the world, after having been reduced in bulk, so as to 
economize to the utmost extent, the cost of transportation. Land 
and labor rise in value precisely as they are emancipated from 
that first and most oppressive of taxes ; and therefore it is, that 
we witness so large an increase in the price of those of France. 

In 1821, her real estate was valued, and the amount re- 
turned to the government was 39,514,000,000 francs, or nearly 
$8,000,000,000. A similar valuation having been made in 1851, 
and before the California gold deposits had begun to affect the 
movements of the world, the amount was found to have risen to 
no less than 83,744,000,000 francs, or $16,000,000,000 — having 
more than doubled in the short period of thirty years. In the 
same year, the total value of the real estate of the Union was re- 
turned at $3,889,000,000; but, as subsequently corrected at the 
Census bureau, it was increased to nearly $5,000,000,000 — that 
having been given, as the true value of all the land and buildings 
of the country. Were we now to add to this, even sixty per cent., 
we should obtain a sum no greater than that which represents the 
addition made to the value of the real estate of France, in thirty 
years. It follows thence, Mr. President, that the fixed property 
here created, in the whole period that has elapsed since the land- 
ing of the Pilgrims, is far less in value than that created by the 
French people, in the brief period you have so well described, of 
constantly repeated financial convulsions among ourselves. 

This is, certainly, a most extraordinary fact, and it behoves us, 
Mr. President, to inquire into the causes of its existence. In 
that period, France has maintained armies that have counted by 
hundreds of thousands, while ours have counted by thousands. 
She has made wars in Europe and Africa ; while, with the excep- 
tion of our discreditable attack on Mexico, we have enjoyed a 
peace that has been undisturbed. She has undergone a succes« 
sion of violent revolutions ; we have had none but those resulting 
from the operation of the ballot-box. Her land has been Oppres- 
sively taxed for the maintenance of fleets and armies, admirals 
and generals, kings and emperors ; whereas, ours has not been 
taxed for a single dollar, to be applied to the purposes of the cen- 
tral government. Nevertheless, the land of France so steadily 
rises in value, that it would now command thrice as large an 
amount of money as could be obtained for all the real estate of 
our Union. 

Why, Mr. President, is it so ? Because, French policy looks 



138 



LETTERS TO THE 



to relieving the farmer from the tax of transportation, and thus 
giving value to the land, and the man by whom it is cultivated ; 
while ours looks to increasing that tax, and destroying the value 
of land. — Because, the one looks to increasing the power of asso- 
ciation and combination ; while the other looks to its destruction. 
Because, the one looks to diversifying the pursuits of the people ; 
while the other seeks, as far as possible, to limit the whole community 
to the pursuits of scratching the earth, on one side, and trade and 
transportation, on the other. Because, the one would tend to create 
a scientific agriculture, and to promote demand for all the powers 
of the man ; while the other seeks to limit the demands upon its 
people, to brute force, on one side, and craft on the other. Be- 
cause, the one looks to increasing the products of the land, while 
augmenting their prices ; and the other, to diminishing the yield, 
while lessening the prices of the things produced. Because, the 
one enables the people subject to it, to import the precious metals ; 
while, the other compels their exportation. Because, the one 
looks towards raising the value of the laborer, and making him 
more free ; while, the other tends towards diminishing his value, 
and thus making the slavery of the white man and the black, the 
law of the land. Because, the one seeks to establish the indepen- 
dence of both the people and the state ; while under the other, 
colonial dependence grows from year to year. Because, finally, 
the one looks to the extension of that domestic commerce which, 
as you have so distinctly seen, is the only sure foundation of a 
great foreign one ; while those to whom we owe the other, have 
dreamed of the erection of a great foreign commerce, upon the 
ruins of a domestic one. 

The more, Mr. President, you study the commercial movement 
of France, the more you will be satisfied of the accuracy of your 
views a.s to the sort of free trade that is really needed by your 
countrymen ; that sort which is required for giving wealth to the 
people, and strength to the government. 

With great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, February 2Qth, 1858. 



PRESIDENT OF THE UNITED STATES. 



139 



LETTER TWENTY- FOURTH. 

That men, Mr. President, become more independent in their 
actions, and more free to combine their efforts with their fellow- 
men, as their faculties become more and more developed, is a 
truth, whose evidence may everywhere be found. So, too, is it 
with communities — their independence of external action grow- 
ing in the direct ratio of the variety in the demand for human 
faculty among themselves. For proof that such is the case, we 
may now, for a moment, look to the working of the English and 
French systems — the one based upon the idea of extending foreign 
trade, at every cost to domestic commerce; and the other, upon 
that of creating a great internal commerce, as the sure foundation 
of a profitable intercourse with other nations. 

That the total number of persons of all descriptions, employed 
in Great Britain in converting cotton into yarn, and in making 
the inferior cloths, the pig iron, the earthenware, and other similar 
commodities, by means of which that country not only pays for 
all the supplies required for her numerous population, but is ena- 
bled* also to bring their producers so much in debt, does not 
exceed half a million, is quite certain. That large quantities 
of produce are there received, aud that very little is given in 
return, is a fact that does not admit of doubt ; and one, too, the 
conviction of whose existence must, sooner or later, force itself 
upon the agricultural communities of the world. Were it now 
fully understood, and were those communities to arrive at the 
conclusion, that they might as well mine and smelt their own ores, 
twist and weave their own cotton, and make their own earthen- 
ware, at the same time saying to those few people — "Come 
among us and mine ore, make iron, spin thread, and weave cloth ;" 
and — that having been done — were they to have the work per- 
formed at home, that they now have done in England, the effect 
would be, that instead of feeding four millions of people, they 
would have but half a million to feed ; and instead of giving such 
prodigious masses of cotton, sugar, coffee, lumber, dye-stuffs, 
and other raw products, in exchange for a little cloth, and very 
little iron, they would have the whole of that immense quantity 
to apply to the purchase of improved machinery, or to that of 
the comforts and luxuries of life. Such an operation would 
require but few years for its accomplishment, and for the rea- 
son, that the British system, based as it is upon the idea of 
cheapening labor, has little tendency to create demand for any- 
thing beyond mere muscular force. Dreading a competition that 
could so readily be established, Great Britain is entirely de- 



140 



LETTERS TO THE 



pendent, for the maintenance of her power, upon the peaceful 
submission of the agricultural communities, to the system of 
trading warfare, that, as you have seen, Mr. President, has been 
established; established, too, in full accordance with the decla- 
rations of some of the most eminent statesmen of. England, in 
reference to "the necessity for strangling in their infancy" all 
attempts at competition with British makers of cloth and iron. 

What, however, would be the effect upon France of a change 
of policy, looking to full protection, on the part of Ireland, Tur- 
key, Portugal, Brazil, India, the United States, and other coun- 
tries ? Would she be placed in a similar position ? She would 
not, because her policy is that of thoroughly elaborating and per- 
fecting her own rude products, and those of other lands received 
in exchange. With her, the value of the raw material bears but 
a small proportion to that of the finished commodity ; and while 
she sends to the world the finest silks and cloths, wines and por- 
celain, her rival exports cotton-twist, blankets, coal, pig and bar 
iron, beer, and earthenware. The one aspires to lead the world, 
while the other seeks to underwork it. In the one, artistic taste 
is being from day to day more fully stimulated into activity; 
whereas, in the other, the tendency towards making of man a 
mere machine, increases from year to year. The one looks to the 
cheapening of labor and land ; whereas, the policy of the other 
tends towards raising the price of both. 

Those who desired to supersede the one, would require only the 
lowest description of manufacturing skill — to be acquired in the 
briefest period ; whereas, those who sought to supplant the other, 
would need a skill to be acquired only at the cost of very many 
years of application ; and a taste, for the development of which 
would be required a ready access to works of art ; and, whatever 
might be their progress, France would still continue in advance. 

In proof that such would be the case, we need only take the 
tables of exports — doing which, we find that France finds her 
customers chiefly in those countries that are already largely manu- 
facturing, and that are, themselves, anxious to compete with her, 
to wit : — 



England 

United States.... 

Belgium 

Sardinia 

Spain 



250,000,000 francs. 
162,000,000 " 
121,000,000 " 
72,000,000 " 
65,000,000 " 



Switzerland 

Zoll-Verein 

Russia 

Hanseatic Cities. 
Holland 



58,000,000 francs. 
42,000,000 " 
14,000,000 » 
13,000,000 " 
15,000,000 " 



Adding to these the colony of Algeria, 103,000,000, we have 
905,000,000 exported in 1852— leaving 345,000,000 for the rest 
of the world ; and nearly all that balance is so divided, as to show 
that France is, everywhere, ministering to the tastes of the more 
refined portions of the various communities of the world. So far, 
therefore, is she from fearing competition, that she has reason to 



PRESIDENT OF THE UNITED STATES. 



141 



desire it — knowing that with every increase in the power, any- 
where, to make cotton and woollen cloths, and iron, there arises 
an increased demand upon her workshops, for commodities re- 
quiring that high development of the artistic faculty, which she 
alone can furnish. 

Turning to England, we find that her exports, in the same year, 
to the advancing portions of Europe, that is to say — 

To Europe, exclusive of Turkey, Italy, and Portugal — amount 

to only £19,000,000 

While the raw material that has undergone the single process 
of twisting, and that goes only to manufacturing countries 
amounts, alone, to £10,000,000 

Adding to this, the unmanufactured metals, and the coal, sent to 
those countries, we shall obtain almost all the balance — England 
having, in fact, but little to send to any country that is itself 
advancing in civilization. 

To this country, the exports were more than £16,000,000 ; but 
of this, nearly the whole amount consisted in common cottons and 
woollens, iron, and other articles requiring little skill or taste ; 
while from France were imported nearly all of those in the pre- 
paration of which artistic skill was manifested. Deducting the 
two quantities above referred to, there now remain no less than 
£38,000,000, or more than half of the whole, for India, Australia, 
Portugal, Turkey, Buenos Ayres, Mexico, and other countries, 
in which there exist few manufactures ; and in which, consequently, 
are found the evidences of barbarism — raw materials being cheap, 
while finished commodities are dear. 

Jhe French system is based upon the idea of the enlargement 
of commerce — resulting from the compression of raw commodities 
into their smallest form ; and from the emancipation of the farmer 
from the tax of transportation. Commerce grows with the growth 
of the powers of man ; and therefore would France profit by the 
adoption in other countries, of the system that has so well been 
carried out at home. 

The English system is based on the idea of the supremacy of 
trade, and the augmentation of the tax of transportation. Trade 
grows with the growth of man's necessities; and therefore would 
England suffer under any system leading, in other countries, to 
development of the faculties, and increase in the powers, of man. 

Such being the case, we can now readily account for the steadi- 
ness of the commercial policy of the one, notwithstanding the 
shocks of repeated revolutions ; and for the exceeding unsteadi- 
ness of the trading policy of the other, although political revolu- 
tions are there unknown. The one, after long experience, has 
recently announced to the world, through the President of the 
Council, M. Baroche, its determination ''formally" to "reject 
the principle of free trade, as incompatible with the independence 



142 



LETTERS TO THE 



and security of a great nation, and as destructive of her noblest 
manufactures. No doubt," as he continued, "our customs tariffs 
contain useless and antiquated prohibitions, and we think they 
must be removed. But protection is necessary to our manufac- 
tures. This protection must not be 'blind, unchangeable, or ex- 
cessive ; but the principle of it must be firmly maintained." 
The other, on the contrary,, has changed its system repeatedly, 
and especially within the last five-and-thirty years. Until 1825, 
it had gone on heaping protection upon protection ; but since 
that time, its policy has been altered and re-altered, until the 
form of the existing one, bears hardly the slightest resemblance 
to that of the days of George III., although the spirit remains 
the same. 

The one is quiet, tranquil, and confident, in its forward move- 
ment ; whereas, the other, restless and doubtful, is unceasingly 
engaged in wars for the extension of trade ; military wars, carried 
on by soldiers and sailors, admirals and generals ; and trading 
wars carried on by means of " large capitals" so directed as to 
crush out competition, abroad or at home. 

The one is rapidly becoming the leader of the advancing nations 
of Europe ; whereas, the other is gradually surrounding itself with 
the ruins of once-important nations, that have been its friends. 

The policy of the one is in accordance with the views of its own 
illustrious Colbert; and with those of Adam Smith, when teach- 
ing that " that country in whose cargoes there is the greatest pro- 
portion of native, and the least of foreign, goods, will always be 
the principal gainer." The other is in harmony with the doc- 
trines of Sir Robert Peel, who taught that England's governing 
principle should be found, in the single determination to " buy in 
the cheapest market, and sell in the dearest one " — buying labor, 
at home and abroad, at a low price, and selling it, both at home 
and abroad, at a high one. The one looks to the elevation and 
enfranchisement of man; the other, to the subjection of the laborer 
to the trader, and to his ultimate enslavement. 

What, now, Mr. President, is our condition, as compared with 
that of France ? Can we maintain commerce where we will ? 
Are we not, on the contrary, forced to go where we must ? Can 
we send wheat, or corn, to the people of California, or Australia ? 
Do those of Brazil, or India, desire to purchase rice or cotton ? 
Assuredly not — their demands upon the outer world being for 
finished commodities, and not for the rude products of the soil. 
How, then, do we maintain commerce with Brazil and California ? 
Is it not by the circuitous route of Manchester and Lyons — the 
whole of the tax of transportation being paid by the farmers and 
planters of the Union ? That it is so, cannot be questioned. 

France, on the contrary, sends the rude products of her soil to 
every country of the world — having first combined tons of corn 
and potatoes with pounds of silk and cotton, clay and gold, in 



PRESIDENT OF THE UNITED STATES. 



143 



accordance with the advice of Adam Smith. Sending hundreds 
of millions, in value, compressed into tens of thousands of tons, in 
bulk, she is enabled to throw upon those who send her raw mate- 
rials, all the cost of transportation, while establishing, from year 
to year, an independence more complete. We, on the contrary, 
forced to maintain commerce with the world, through the medium 
of foreign ships and mills, become daily more and more dependent. 
Why, Mr. President, is it so ? Because the central government — 
refusing to perform the duties devolved upon it by the States — 
limits its views to its own protection, and neglects the protection 
of the people. 

As a consequence of this unhappy state of things it is, that the 
planter is compelled to pray for short crops instead of large ones. 
With the one — freights being low, while prices are high — he is 
enriched. With the other — freights being high, and prices low — 
he is impoverished. So, too, with our farmers, dependent, as 
they everywhere are, upon the trivial demand of Europe, conse- 
quent upon short crops in England, France, or Germany. Give 
them that great domestic commerce, the need of which is to your- 
self, Mr. President, so very evident — that commerce which France 
so rapidly obtains — and they will, then, be enabled to rejoice in 
the prosperity of the agricultural interest everywhere. 

Hoping that by aid of reforms to be initiated by yourself, our 
farmers and planters may be enabled to obtain that free inter- 
course among themselves, and with the outside world, of which 
they have been so long deprived, I remain, Mr. President, 
With great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, March 3rd, 1858. 



144 



LETTERS TO THE 



LETTER TWENTY-FIFTH. 

We are constantly assured, Mr. President, that the protective 
system, favorable as it may be to commerce at home, tends to the 
annihilation of foreign commerce. All the facts of history tend, 
however, to prove the reverse of this — the power to maintain 
intercourse with foreign nations having always grown with the 
growth of domestic commerce, and it having been by the latter's 
help, alone, that the former has been maintained. The great de- 
velopment of British external commerce followed that of the inter- 
nal one, which owed its existence to a protective system of the 
most stringent character. So, too, has it been, with all the pro- 
tected countries of Europe — the power to maintain exterior com- 
merce having, everywhere, followed the adoption of measures 
looking to the development of an internal one, as is shown by the 
following facts : — 

From 1826 to 1835, as we have seen, the domestic exports of 
France averaged, only 500,000,000 francs; from 1845 to 1849, 
they averaged 1,000,000,000 ; and in 1856, they had attained the 
enormous amount of 1,893,000,000 — having almost quadrupled 
in the five-and-twenty years, during which we have been subjected 
to such repeated crises, consequent upon the determination of the 
Federal government to secure to itself the control of the local 
banks and their circulation. 

In the free-trade period of Russia, from 1814 to 1824, the quan- 
tity of foreign merchandise consumed averaged only $32,000,000 
a year. Growing gradually, by aid of highly protective measures, 
the power of that country to be a customer to foreign nations, had 
risen, at the opening of the Crimean war, to $75,000,000. 

The domestic exports of Belgium, in 1828, amounted to only 
156,000,000 francs. By 1850, they had become 263,000,000. 
In 1856, they were 375,000,000 — the exports of food from that 
little country, with its four and a half millions of people, having, 
thus, been greater than our own average, in the decade ending in 
1855 — embracing, as it did, the periods of the Irish famine, and 
the short crops of Germany and France. Belgium follows the 
advice of Adam Smith, in combining her food and wool in the 
form of cloth, and thus enabling it to travel cheaply to the most 
distant countries. We repudiate it, and hence the inability of our 
farmers to maintain commerce with the world. 

Spain, impoverished as she has been, by the " warfare " of the 
smugglers of Gibraltar, and by repeated revolutions, increased 
her exports from 71,000,000 reals, in 1827, to 166,000,000, in 
1852 



PRESIDENT OF THE UNITED STATES. 



145 



Why it is, Mr. President, that such have been the uniform 
effects of the adoption of a system looking to the protection of the 
farmer in his efforts to bring the consumer to his side, and thus 
relieve himself from the tax of transportation, will readily be un- 
derstood by all who study the following facts, in reference to the 
highly protected country of the Zoll- Verein : — 

Forty years since, Great Britain received from Germany only 
3,000,000 of pounds of wool; but, with the decline of German 
manufactures, the export of raw materials so largely increased, 
that, in 1825, the receipts in England, from that source alone, 
amounted to no less than 28,000,000 — a large portion of which 
was paid for in English cloth. Such having been the state of the 
trade, it follows, necessarily, that wool in Germany must have been 
cheaper than in England, while cloth must have been dearer — the 
prices of the two having been widely distant from each other. 

In 1851, the quantity of wool, and woollen yarn, imported into 
Germany, amounted to 34,000,000 of pounds, and the quantity 
exported to 9,000,000 — leaving not less than 25,000,000 as the 
net import, and proving that wool in Germany must have been 
higher than in other countries. In the same year, the quantity 
of woollen cloth exported, amounted to 12,000,000 of pounds — 
proving that it must have become cheaper than Ln other countries. 
The prices of raw material and finished articles had steadily ap- 
proximated to each other, and thus was furnished the most con- 
clusive evidence of advancing civilization. 

Two-and-twenty years siuce, the import of cotton, and yarn, into 
Prussia, amounted to 16,000,000 of pounds — having increased, 
in the twelve years that had then elapsed, but 6,000,000. The 
movement in the Zoll- Verein, in the period that has since elapsed, 
is thus given : — 

1836. 1845. 1851. 

Cotton 152,364 cwts. ...... 443,847 cwts 691,796 cwts. 

Cotton twist 244,869 " 574,303 " 676,000 « 

397,233 cwts. 1,018,150 cwts. 1,362,796 cwts. 

The export of yarn and cloth, in this latter year, amounted to 
159,241 hundredweights, leaving for domestic consumption more 
than 1,200,000 hundredweights, or 130,000,000 of pounds — this 
proving, first, that cotton cloth had become very cheap ; second, 
that the power of consumption, among the agricultural population, 
had largely increased. That increase was a necessary consequence 
of the enlargement of the market for labor, and for the products 
of land, resulting from the extension of this manufacture. The 
weight of cotton goods exported, was, as we see, less than an 
eighth of that of the wool and yarn imported ; and yet, the value 
of that small quantity, was 20,000,000 of thalers = $15,000,000 
— being almost enough to pay for the whole import. At least 
10 



146 



LETTERS TO THE 



three-fourths of this large sum consisted of labor representing 
German food, thus enabled readily to go to distant countries. 

Thirty years since, Germany supplied the world with rags, and 
imported paper, of which her consumption was then but small. 
Xn 1851, all had changed ; the net import of the first having been 
37,000,000 of pounds, while the net export of paper had risen 
to 3,500,000. In the first period, rags were cheaper than in other 
countries, while paper was dearer. In the second, rags were 
dearer, while paper was cheaper. The prices of the two had 
greatly approximated ; and therefore had the consumption of 
paper so much increased as to absorb not only the whole quantity 
produced at home, but, in addition thereto, more than 30,000,000 
pounds produced abroad. You will, Mr. President, more fully 
appreciate the value of these facts, when you reflect how large 
must have been the domestic production of rags, resulting from an 
addition to the consumption of cotton amounting to more than 
100,000,000 of pounds weight. 

In 1830, the quantity of coal that was mined was but 7,000,000 
tonnes — and adding thereto 1,200,000 of brown coal, we have 
a total of 8,200,000. In 1854, the first had increased to 
34,000,000, and the last to 12,000,000 — making a total of 
46,000,000. 

In 1834, there were made 76,000 tons of bar iron. In 1850, 
the quantity had risen to 200,000 ; and the pig iron that was 
made amounted to 600,000 tons. The present consumption of 
the Zoll-Verein is given at fifty pounds per head, per annum — 
being more than in any country of Europe except France and 
Belgium ; and more than in any country of the world, except the 
two already named, Great Britain, and the United States. It is, 
however, the first step that is always the most costly, and the 
least productive. Every furnace that is built, and every mine 
that is opened, tends to promote further progress in the same 
direction — each and every of them tending to promote association 
and combination. In 1849, not a furnace was to be seen in the 
neighborhood of Minden, in Westphalia, but "now," says a re- 
cent traveller, "they stand like towers about the broad plain" — 
making a vast demand for food, clothing, and labor. Of the 80 
copper-mines of Prussia, no less than 24 have been opened within 
the last few years. Every mine, every furnace, and every mill, 
aids in the creation of new roads, and the improvement of old 
ones — facilitating the opening of new mines, the utilization of the 
powers of nature, and the development of mind ; and thus in- 
creasing the value of man, while diminishing that of all the com- 
modities required for his use. 

The value of cotton and woollen goods exported in 1851, was 
30,000,000 of thalers == $25,000,000 — the chief part of which 
large sum, consisted of the food that had been combined with the 
labor, in the process of converting it into cloth. As a consequence 



PRESIDENT OF THE UNITED STATES. 



147 



of this, the necessity for going abroad to find a market for food 
had so greatly decreased, that the net export from the country 
that only thirty years since was the granary of Europe, was but 
10,000,000 bushels. 

Look where we may, Mr. President, we meet with evidence of 
the fact, that the power to maintain a profitable foreign commerce 
grows with the growth of the domestic market for food, wool, and 
laborers, and the consequent diminution of the exhausting taxes 
of trade and transportation. Look, too, where we may, we meet 
with evidence of the necessity for protection, as the only means 
by which a great domestic commerce can be created ; and of your 
own perfect accuracy in regarding that commerce as the thing we 
really need — it being the only sure foundation of an extended 
intercourse with other countries. Commerce grows with every 
diminution in the necessity for machinery of transportation — as 
is shown in all the countries which follow in the lead of'Colbert, 
and of France. It declines, with every increase of this necessity, 
as is shown in Ireland, Portugal, Turkey, the United States, and 
all others, which follow in the direction indicated by England 

That commerce may grow, and that nations may acquire that 
real independence which exhibits itself in the power to maintain 
direct intercourse with the world, there must be steadiness and 
regularity of the societary action. Growing always with the 
growth of domestic commerce, stability is found, in all countries, 
existing in the direct ratio of the diminution of dependence on 
foreign trade; and therefore is it, that France, Belgium, Germany, 
and Russia, have passed through the recent crisis, almost un- 
harmed ; while in Britain, and among ourselves — the two commu- 
nities whose policy looks to the sacrifice of domestie'eommerce at the 
shrine of trade — the societary movement would have been almost 
at an end, had not the banks of both suspended payment. 

The more you reflect upon these facts, the more, Mr. President, 
it will, as I think, be obvious to you, that all our difficulties have 
their origin in excess of centralization, and not of localization ; 
and that it is to change in the action of the central government, 
and not to interference with the local ones, we must look for 
remedy. 

With great respect, 

Your obed't servant, 

Henry C. Carey, 

Philadelphia, March Sth, 1858. 



148 



LETTERS TO THE 



LETTER TWENTY- SIXTH. 

The real and permanent interests of all the members of a com- 
munity, Mr. President, are in perfect harmony with each other — 
each and every man profiting by whatever tends to increase the 
productive power of his neighbors. So, too, is it with the com- 
munities themselves — each profiting by the increase in the pro- 
ductive power of each and all. That it may increase, there must 
be, in each, a growing power of association and combination, re- 
sulting from increase in the diversity of employments — the con- 
sumer and the producer taking their places by each other's side. 
To prevent such approximation is the object of the 1 'warfare" 
waged by the British manufacturer, as described in a former letter ; 
and hence it is, that discord grows so steadily in all the coun- 
tries subject to the British system — Ireland and India, Turkey 
and Portugal, Jamaica, and these United States. Seeking evi- 
dence of the existence of a perfect harmony of international inte- 
rests, and of the necessity for measures tending to a reduction of 
the power to carry on that war, we may look to the statistics 
of the cotton trade for the past few years, to some few figures in 
regard to which, I desire now, Mr. President, to invite your 
attention. 

Twenty years since, France consumed 200,000 bales of cotton. 
She now requires 400,000. Twenty years since, Germany re- 
quired 100,000. She now requires 400,000. Twenty years 
since, Sweden took 6000 bales. She now takes 60,000. We 
have, thus, an increase in three highly protected countries, 
amounting to 550,000. Adding to this, the additional demand 
of Belgium and D-enmark, Russia, Austria, and Spain, we obtain 
about 700,000, as the quantity added to the consumption, in the 
protected countries of Europe. Turning now homeward, we find 
the addition in our own consumption, in the six years that followed 
the passage of the protective act of 1842, to have been about 
300,000 bales; and thus do w r e obtain, as the total additional 
consumption of the protected countries, the quantity of a million 
of bales. 

In four years, ending with 1838, the quantity taken by the mills 
of Great Britain averaged 1,100,000 bales. In the four, ending 
with 1854, the average was 1,150,000 — the difference having been 
650,000. In the same period, however, there had been an in- 
crease in the export of mere yarn, to be woven abroad, amounting 
to 30,000,000 pounds ; and an increase in the imports from India, 
to the extent of nearly twice that quantity, as I have reason to 
believe, although unable to obtain the precise figures. This last 
constitutes no addition to the supply of the world, there being no 
reason for believing that more cotton is raised in India now, than 



PRESIDENT OF THE UNITED STATES. 



149 



was raised there twenty years since. The excess import into 
England, is a consequence of decline of the domestic manufac- 
ture, and of the growing necessity, throughout India, for making 
exchanges among themselves, through the medium of distant 
lands — precisely as the people of Illinois and Mississippi are now 
compelled to do. The additional yarn being included in the con- 
sumption of the countries to which it goes, and the additional 
India cotton giving no increase of supply, the two quantities are 
to be deducted from the apparent increase of British consumption. 
That done, we have little more than 400,000 bales, as the growth 
of consumption outside of the protected countries, against a mil- 
lion within them. Such being the case, the real interests of the 
planter would certainly be promoted, by the adoption in Ireland, 
India, Brazil, Turkey, Portugal, and other unprotected countries, 
of the system under which the consumption of Central and North- 
ern Europe has so rapidly and wonderfully increased. 

How is it possible, Mr. President, that these various commu- 
nities could accomplish the work suggested ? All of them are 
poor, and so, it will be said, they are likely to remain. So must 
they do, while they shall continue the work of destroying capital, 
as they are now doing ; but, so they will not do, whenever they 
shall begin to establish that circulation of service which consti- 
tutes society, and economizes labor. Ireland feeds daily more 
than seven millions of people — all of them consumers of capi- 
tal, while but few of them produce anything to represent the 
things consumed. More than three-fourths of the mental and 
physical power of that country goes to waste ; but that waste 
would cease, so soon as A and B were enabled to exchange ser- 
vices with C and D ; and they, each and all, were enabled to 
exchange with others. Estimating the loss as being equivalent 
to the labor of only two millions of men and women, and the 
value of the things they might produce, at only half a dollar per 
day, we obtain a daily amount of a million of dollars ; and an 
annual one of $300,000,000. The effect of this labor in utilizing 
the coal, the ore, and the thousand other things, now useless, by 
which those idle millions are surrounded, would be, to add almost 
as much, yearly, to the value of the land in cultivation ; and 
here we have an annual amount, far exceeding the total value of 
the machinery for mining coal and smelting iron ore, and for 
spinning and weaving cotton, wool, flax, and silk, now in use in 
England. Turning to India, we see a hundred millions of people, 
nine-tenths of whose powers are wasted for want of domestic com- 
merce. Give them that, and capital will at once exist, to an 
amount far greater than that of the machinery of Britain and 
Prance combined. Looking next to Turkey and Portugal, we 
see millions of people in a situation precisely similar ; and yet, 
they must all be fed, clothed, lodged, and kept in order for daily 
work. The daily loss, there, is greater than the annual amount 
of skill and labor given by England to the conversion of the cot- 



* 



150 



LETTERS TO THE 



ton and the wool, the iron, the copper, and the tin, they can 
afford to purchase. Let employments be diversified, and that loss 
v/ill cease ; and then, capital will be found to exist in vast abun 
dance. So is it everywhere. Mexico and Peru would have ar. 
abundant supply of capital, were they enabled so to modify their 
policy as to produce that circulation which is required for se- 
curing, that each and every man be enabled to sell his own 
powers, and to become a competitor for the purchase of those of 
others. All force results from motion, and it is only because 
there is no motion in the society of Ireland, India, and Turkey, 
that those communities continue poor. 

Looking now homewards, Mr. President, we find a waste of 
capital, in the form of physical and mental power, not exceeded 
by any country of the world, with the slightest claim to be held 
as civilized. Farm after farm is cleared, and State after State 
occupied, to be then in part abandoned, because of the growing 
necessity for robbing the earth of its soil, to be sold in distant 
markets. Mills follow mills, and furnaces follow furnaces — ruin- 
ing, in quick succession, all who undertake such works. Em- 
ployers and workmen spend years in acquiring skill — to be then 
turned adrift, to seek, in the wilds of the West, the food and 
clothing that the policy of the central government denies to them 
at home. 

With every step in this direction, the tax of transportation 
grows — the necessity for new roads increasing, as the power to 
make such roads declines. The proportion of the population 
engaged in the work of transportation, and in political and tra- 
ding speculation — the class of middlemen — that class which lives 
at the cost of the producers — is, therefore, a continually increasing 
one. Hence, Mr. President, it is, that we so steadily decline in 
both morals and manners — that being the road from civilization, 
and not the one leading towards it. 

Look where we may, we witness a waste of labor, consequent 
upon the absence of that diversification in the demand for human 
effort, which is needed for giving us that freedom of domestic 
commerce, regarded by yourself as being so essential to the crea- 
tion of an extended intercourse with foreign countries. Millions 
of human engines are constantly burning the fuel required for the 
production of the power to labor, and as constantly blowing off 
the steam that is produced. Look where we' may, we see mills 
and furnaces, mines and roads, scarcely, even when at all, em- 
ployed — all the power they are prepared to furnish, thus going to 
waste. Why is it wasted ? Because, unable to find a market for 
his grain, the farmer is forced to store it. Why can he not sell 
it ? Because the miller, the weaver, the carpenter, the miner, 
the mason, and the laborer, are unable to sell the force resulting 
from the consumption of food. 

Look, I pray you, Mr. President, to the extraordinary waste 
of capital, consequent upon the necessity for using the most perish- 



PRESIDENT OF THE UNITED STATES. 



151 



able materials in our houses, ships, roads, bridges, and other con- 
structions, of every kind. This, too, is a growing waste, as is 
proved by the fact, that the rate of insurance against fire has 
doubled in the last few years. In countries that are advancing in 
civilization, security increases, and the rate declines. With us, 
security steadily diminishes, and the rate increases — thus furnish- 
ing further evidence that our tendencies are from, and not to- 
wards, civilization. Why is it, that we use so little iron ? Is 
it because of any deficiency of coal and ore ? Certainly not. 
Why, then, do we not profit by them ? The country abounds in 
laborers, who would gladly employ themselves in the development 
of the treasures of the earth, could they obtain food in exchange 
for labor. Why is it so ? Because the central government leaves 
the people entrusted to its care, exposed to a "warfare" having 
for its object, the prevention of the mining of coal, or the making 
of iron, in any country, except the single one of Britain. Because 
it holds, that while bound to protect itself, it is under no obliga- 
tion to protect its constituents. 

Look next, I pray you, Mr. President, to the taxation of our 
farmers, for the maintenance of the 1,000,000 tons of shipping, 
that carries our products to the distant markets, and reflect, 
that the cost of maintaining this great fleet, is paid by the 
people who have rude products to sell, and not by those who 
buy them. The man who must go to market, must pay the cost 
of going to it, let it take what form it may. The corn and the 
cotton pay for the maintenance of the ships — leaving to the cloth 
all the profits resulting from their contributions. 

Look further, to the fact, that the loss of shipping, in a single 
year, by age and accident, is no less than 93,000 tons, as shown 
in the last Treasury Report. At $40 a ton, we have, here, no 
less than $31,000,000. Add to this, for the cargoes of these 
vessels, only a similar amount, and you have $74,000,000 ; all of 
which falls upon the people who furnish the machinery of trans- 
portation — it being the community whose products are most bulky, 
that pays the cost of going to, and returning from, the market. 

Throughout the Union, Mr. President, there is a waste of power 
unparalleled in the world. That power is capital. At how much 
might it be valued, were it fully applied ? At more than the 
whole of our present product — the quantity wasted being greatly 
more than that employed. Our present production has been 
estimated at $3,500,000,000 a year — being nearly $10,000,000 
a day. Estimating the daily waste at no more than that sum, 
we should have for the weekly one, a sum equal to the capital 
that has been required for the creation of all the cotton-mills of 
England. Why do we not economize this capital, and let it ap- 
pear in the form of mills ? Why do we not bring the spindle to 
the plantation ? Why do we not make a market at the mines 
and furnaces, for the produce of the farm ? Because the central 
government refuses to permit the people to make the effort, once 



152 



LETTERS TO THE 



for all, to free themselves from the tax of transportation. Be- 
cause, in opposition to the views so well expressed by yourself, 
your immediate predecessors have held, that it was better for each 
man to go daily to the spring in search of water, than that all the 
men should unite in the effort to construct an aqueduct, by means 
of which the water should be enabled to come daily to their doors. 
That, Mr. President, is precisely what we are doing — each man 
sending his little products to the distant market, at daily cost for 
transportation, when only the slightest effort would be required 
for bringing the market to their land, and thus annihilating, at 
once and, for ever, the tax of transportation. 

In all countries, capital accumulates in the precise ratio of the 
economy of human power. That it may be economized, there 
must be differences in society, resulting from the development of 
the various faculties of men. The commercial policy of France 
tends in that direction, and therefore does she grow rich ; while, 
for want of that policy, Turkey and Portugal, Ireland and India, 
and our Union, decline from day to day — doing this for the plain 
and simple reason, that in each and every of them there is an en- 
forced waste of capital, amounting, weekly, to more than the 
annual value of the foreign manufactures they consume. Let them 
be emancipated from the dominion of trade — let them have com- 
merce at home — and they will soon have more to sell, and will be 
enabled to buy far more than they now do — becoming larger cus- 
tomers to the producers of cotton and sugar on the one hand, and 
to the makers of silks and ribbons on the other ; and adding, too, 
to the market of these latter, by increasing the demand for the 
products of the former. 

The farmers of the world, Mr. President, are natural allies, as 
against the trader — he seeking to have their products at low 
prices, and they desiring to sell at high ones. In the natural 
order of things, then, the agricultural nations should be found 
united in their resistance to a warfare against themselves, having 
for its object, the cheapening of their products. In Europe, they 
are so found — all the advancing countries having adopted mea- 
sures of protection. As a consequence, their demands upon our 
planters are steadily increasing ; and yet, strangely enough, our 
planting interest is the steady opponent of protection, here and 
everywhere ! Constantly profiting, as they do, by the increased 
demands of France and Germany, they appear before the world 
as advocates of the system, under which the Irish and Portuguese 
demand for cotton, has almost disappeared. Hence it is, that, 
instead of placing ourselves, as we might do, in the lead of the 
world, we are rapidly declining towards that condition of colonial 
dependence, from which we were rescued, by the war of 1716. 
With great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, March 10th, 1858. 



PRESIDENT OF THE UNITED STATES. 



153 



LETTER TWENTY-SEVENTH. 

The first of all the taxes to be paid by land and labor being 
that of transportation, it follows, Mr. President, that it takes pre- 
cedence of contributions required for the maintenance of the State. 
All that Iowa can claim of her citizens, is a share of the few- 
cents there received for a bushel of corn, and not a share of the 
many cents paid for it in Manchester. 

The tax of transportation diminishing with every increase in 
the power of combination, consequent upon increase in the diver- 
sity of employments, it follows, necessarily, that the power of 
the State grows with the growth of the power of combination 
among its people. The farmer close to New York, who sells his 
corn at a dollar a bushel, is more able to contribute to the sup- 
port of government, than his competitor of Iowa, who gives four, 
five, or six bushels, for a similar quantity of money. 

The gseater the diversity of employments, the more is the ten- 
dency towards development of the various powers of the earth, 
and towards the creation of manufacturing and mining towns and 
villages — each constituting a local centre of attraction, capable 
of counteracting the centralizing tendencies of the State at large. 

That these propositions are true, cannot, Mr. President, be 
questioned. Being so, the general laws deducible from them 
would seem to be as follows : The more numerous the demands 
for human faculty, and the greater their variety, the greater is 
the power of combination among men — the more productive must 
be their labor — the greater must be the tendency towards the 
creation and extension of local institutions — and the greater must 
be the power of the State of which they are a part. 

Such being the law, it follows, necessarily, that the less the 
variety in the demand for human powers, the greater must be the 
tendency towards exhaustion of the soil, and dispersion of its 
people — every step in that direction being accompanied by dimi- 
nution of local power, and growing weakness of the State. 

That such is the law, we have proof in the enormous revenue 
of England of the present, as compared with the England of the 
Plantagenets ; and in those of France, and all the countries that 
follow in the lead of Colbert, as compared with Ireland, India, 
Portugal, Turkey, and all other countries that follow in the direc- 
tion now indicated by the economists of England. 

How, Mr. President, is it with ourselves ? The answer to this 
question would seem to be found in the single statement, that em- 
ployments become less diversified from year to year. With en Hi 
successive year, for ten years past, our people have been nu.ro 



154 



LETTERS TO THE 



and more compelled to make their election between the work of 
robbing the soil, on the one hand, and plundering their fellow 
men, on the other — the proportion borne by traders and trans- 
porters, speculators and peculators, lawyers and politicians, office- 
hunters and office-holders, and middlemen of all descriptions 
to the whole mass of society, having been a constantly increasing 
one. Great as, in those years, has been the tendency in that direc- 
tion, it has increased tenfold, in the brief period in which you have 
occupied the presidential chair — mills, furnaces, mines, and ma- 
chine shops having, everywhere, been closed, and hundreds of 
thousands of people having been reduced to choose between 
crime, on the one hand, and destitution, if not even death, on the 
other. 

Such, Mr. President, being the state of things among the peo- 
ple, what should it be, in the relation of the people to the State ? 
If increasing diversity of employments among the one, gives 
strength for the maintenance of the other, should not decline in 
that diversity be attended with growing weakness in the State ? 
Assuredly it should, and that it really is so, we shall obtain abun- 
dant evidence, turn to what portion of the Union we may. 

Looking first to New England, we witness an emigration of the 
most remarkable kind — each and every stage thereof being accom- 
panied by consolidation of the land, diminution of cultivation, 
and decline of power to maintain schools, churches, roads, and go- 
vernment. From one quarter, we hear that it has become "evi- 
dent that the number of families in quite a number of our agri- 
cultural towns is growing less. The old homesteads," as we are 
further told, "become the property of the adjacent husbandman, 
or go to ruin under the proprietorship of some far-off owner." 
From another, we learn,. that "many of the churches are reduced 
to the last extremity," and that, "but for the missionary society, 
by which not a few of them are supplied, would yield at once to 
utter discouragement. " Such being the general tendency through- 
out New England, the "wonder is not, that so many Eastern 
churches are drooping, but that they have so long borne up 
against the constant and copious depletion of their vigor and 
their piety. ' ' 

Turning now to New York, we find a State in which the average 
yield of wheat, has fallen to little more than a dozen bushels — 
one, in which the diminution of the rural population, and the con- 
solidation of the land, become more rapid with each successive 
year. Taking next, the Western portion of the State, one of the 
finest wheat-growing countries of the world, so recently a wilder- 
ness, we find its farmers already engaged in discussing the neces- 
sity of abandoning the wheat culture, as the only means of freeing 
themselves from the ravages of insects, provided by the Creator 
for the removal of diseased and decaying vegetable matter. Com- 
pelled to the exhaustion of their soil, and unable to vary their 



PRESIDENT OF THE UNITED STATES. 



155 



cultivation, their plants become weaker from year to year, and 
more and more fitted to become the prey of the fly, and other 
enemies. As a consequence of this it is, that emigration steadily 
increases, and that the power to maintain the local institutions as 
steadily declines. 

The young Ohio, now but little more than half a century old, 
has already become, and for similar reasons, the great emigrating 
State of the Union — the diminution in the yield of her land, 
having kept equal pace with augmentation of the pressure of 
taxation for local purposes. Passing thence, to the yet younger 
Indiana, we find the same great fact — local institutions that had 
been self-supporting, having been compelled to look abroad for 
the means of continuing their existence. 

Turning now South, we see, in Virginia, a community occu- 
pying a land, that has been blessed by nature to an extent not 
exceeded in the world, and yet her government finds itself com- 
pelled to tax tradesmen and tavern-keepers, attorneys and den- 
tists, clocks, harps, pianos, carriages, slaves, and numerous other 
commodities and things, for the purpose of obtaining the means 
required for its support. Quite recently, it has been proposed 
to lay an export duty upon oysters, as a means of maintaining the 
declining credit of the State ! Having torn out and sold her 
soil, she has little now to sell, but slaves ; and, as a necessary 
consequence, the burthen of the local institutions becomes greater 
from year to year. How it is with South Carolina, you have 
seen, Mr. President, in an extract from a Report made to the 
'Agricultural Society of that State, given in a former letter.* 
Georgia has almost ceased to increase in population, although 
her territory, properly cultivated, would support half the people 
of the Union. Alabama, a State that, but forty years since, was 
almost entirely unoccupied, is following rapidly in the train of 
Carolina and Georgia — the yield of her soil decreasing — land 
becoming consolidated — and the power of extending, or even 
maintaining, churches, schools, or State, declining with each 
successive year. 

The policy of the central government, Mr. President, tends to 
the subjection of the farmer, and the planter, to the trader, and 
to the building up of great cities, to be supported at the cost of 
those who produce corn and cotton, and need to consume cloth 
and iron. Look, I pray you, to the fact, that the city govern- 
ment of New York alone, expends, this year, more than $8,000,000. 
Who are the payers of these millions ? The trader ? The specu- 
lator ? The property-holder ? The ship-owner ? It is none of 
these — all of them exercising the power to tax the unfortunate 
producers who find themselves compelled to depend upon distant 
markets, and to accept a single yard of cloth in exchange for the 



* See note to Letter XXII. 



156 



LETTERS TO THE 



corn that commands, in Manchester, ten or a dozen yards. The 
man who must go to market, must pay the cost of getting there, 
let it take what form it may; and among the items of cost, that of 
maintaining the traders, brokers, and speculators, of a city like 
New York, stands forth most conspicuously. The necessity for 
going to a single and distant market, increases with every year — 
every step in that direction being attended by an augmentation 
of the power of the trader and transporter, accompanied by de- 
cline in the powers of the land, and in the prices of its products. 
These, Mr. President, being evidences of declining civilization, 
we need be at little loss to account for the fact, that it has been 
here declared, that "free society has proved a failure," and that 
bondage is the natural condition of the laboring-man, be he white 
or black. 

How is it, with our central government — the only one, claim- 
ing to be regarded as civilized, by which it is held, that the duties 
of government are limited to the protection of itself, and the com- 
pensation of its members and its servants — leaving wholly out of 
view the protection of the people, for the promotion of whose in- 
terests it was established ? Do its demands upon the people 
diminish with the decline in the powers of the land, and in the 
prices of its products? Does the farmer who takes 12 bushels 
where his predecessor had obtained 24, pay less to the support 
of the Federal government ? Does the flour which now sells for 
$4, contribute less to the support of Federal officers, than that 
which, forty years since, was sold at $10 ? Does the cotton which 
sells at 8 cents, contribute less for the support of ships of war, 
than that which sold, in 1816, at 25 ? Is the tobacco which com- 
mands $50 or $60, less taxed for the payment of senators and 
representatives, than that which sold, forty years since, for $100 
or $120 ? — Let us, Mr. President, inquire. 

In the half century which followed the close of the war of 1783, 
the highest expenditure of the Federal government, in time of 
peace, was $14,000,000 ; and even that amount had been reached 
only in the first term of General Jackson's administration — 
the average expenditure of his immediate predecessor, Mr. Adams, 
having been only $12,500,000, while that of Mr. Monroe's two 
terms, had been $13,000,000. 

The average contribution, in the times of Messrs. Adams and 
Monroe, may be taken at about $1.70 per head. In General 
Jackson's first term, it was less — the population of 1830 having 
been nearly 13,000,000, and the amount of contribution only 
$14,000,000 ; or little more than a dollar per head. The reduc- 
tion thus exhibited, was evidence of growing strength of the local 
powers — proving advance in civilization. 

Five-and-twenty years have since elapsed, during the whole of 
which time, as you, Mr. President, have seen, the central govern- 
ment has been engaged in almost ceaseless efforts to extend its 



PRESIDENT OF THE UNITED STATES. 



157 



powers, at the cost of the local authorities. During nearly all 
that period, its policy has tended to diminish the number of em- 
ployments open to our people — to lessen the power of combina- 
tion for any useful purpose — to increase the cost of transporta- 
tion — to make the farmer and planter more dependent on the 
distant market — and thus to re-introduce the colonial system, so 
well described by Mr. Gee, from which we were emancipated by the 
war of 1776. The result is seen in the facts, that, while the popu- 
lation has increased but about 180 per cent., the expenditure has 
quintupled in amount, and more than doubled in its ratio to the 
number of persons by whom the contributions were paid. 

Why is this so ? Because, in opposition to tire practice of the 
enlightened and civilized countries of the world, it is held by our 
central government, that the larger the space occupied by any 
given number of people, and the less, consequently, the power of 
association and combination, the greater must be the power of 
the state. Always on the watch for the acquisition of land, 
however poor, we have gone on, adding Florida to Lousiana, 
Texas to Florida, California to Texas, and New Mexico to Cali- 
fornia ; and now hold ourselves ready, at almost any cost of 
honor, or of treasure, to become proprietors of Cuba, or Sonora. 
With every step in that direction, there arises a necessity for in- 
crease of fleets and armies, and increase in the number of public 
officers — with corresponding decrease in the power of the people 
to provide the means required for their support. In all advancing 
countries of the world, the proportion of the proceeds of labor 
required for the purposes of government, is a decreasing one. In 
all declining countries, it is an increasing one. With us, it steadily 
increases — the amount demanded, per head, being now twice as 
great as it was, when the selling prices of our raw products were 
more than twice as high as they are now. 

That the progress of men, whether towards centralization or 
localization, slavery or freedom, barbarism or civilization, is one 
of constant acceleration, is a truth, the evidence of which is found 
in every page of history ; but nowhere, Mr. President, can stronger 
proof be found, than in the records of our Treasury. Fifteen 
years since, under the administration of Mr. Tyler, the expenditure 
of the Federal government was $23,500,000. It is now $70,000,000, 
and there is every reason to believe, that before the end of your 
administration it will reach $100,000,000 — the necessity for ships 
of war, and soldiers, increasing with the decline in value of all 
the commodities we have to sell. Five years since, the expendi- 
tures of New York city were under $3,000,000. They are now 
$8,500,000 ; and there is every reason to believe, that before the 
close of another decade, they will have largely grown— the power 
to tax the farmers and planters of the country, growing with every 
step in the progress towards reduction of the population to de- 



158 



LETTERS TO THE 



pendence on the sale of the soil, in the form of wheat and cotton, 
for the means of present support. 

For half a century, during which the Federal government was 
administered by Washington and his successors, down to Jack- 
son, the general tendency of its action was towards carrying into 
practical effect the Declaration of our Independence. During 
nearly all that time, there was a general tendency towards increase 
in the diversity of employments, with constant increase in the 
power of association, in the strength of local action, and in the 
steadiness of the currency — no general suspension, in time of 
peace, having occurred in all that time. In the period that has 
since elapsed, the policy of the revolution has been abandoned, 
with constant increase in the dependence of the planter and farmer 
upon the distant trader. The power of local action, therefore, 
steadily declines, with constant diminution in the respect of the 
central government for local rights, and growing instability of the 
currency — the suspensions of payment, in that brief period, having 
been no less than three in number. 

In the half century from Washington to Jackson — the policy 
of the country having been that of peace, and of the extension of 
that domestic commerce you have so well described — the Federal 
government was economically administered, and the power to con- 
tribute to its support was a steadily augmenting one. Since then 
— the policy having become that of free trade, annexation, and 
war — the expenses of the central government have greatly in- 
creased, while the power to contribute to its support, or to that 
of local institutions, has tended to diminish. In the first, Mr. 
President, all the phenomena we meet are those of an advancing 
civilization. In the other, they are those of a declining one. — 
How far the one, or the other, has tended to the production of 
strength in the State, I propose to examine in another letter — 
remaining meanwhile, 

With great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, March 12th, 1858. 



PRESIDENT OF THE UNITED STATES. 



159 



LETTER TWENTY-EIGHTH. 

Steadiness and regularity of movement, in machinery of any 
kind, is necessary to the maintenance of motion, and the develop- 
ment of power. A steam-engine subjected to sudden and repeated 
shocks, could have but a brief existence. So, too, Mr. President, 
is it with individuals and societies — regularity of action being 
indispensable to the development of their powers, to durability, 
and to increase of their influence on the movements of the world 
at large. How far such regularity has been attained among our- 
selves, and how far our various systems of policy have tended to 
augment, or lessen, the ability to control our own movements, and 
to influence the action of the world, it is proposed now to show. 

Peace was restored, to the world in 1815. We had passed, 
almost unharmed, through a war with Great Britain, and had 
come out of it rich and strong. The tariff being a highly protec- 
tive one, the customs-revenue was large — exceeding $36,000,000. 
One year later, the system was changed — all the changes being 
in the direction of present, or ultimate, abandonment of the idea 
of protecting the farmer in his efforts to bring the consumer to 
his side, and thus relieve himself from the wasting tax of trans- 
portation. Factories and furnaces being, therefore, closed, 
mechanics and laborers were compelled to seek the West, and 
sales of public land rapidly increased. Large receipts from both 
land and customs gave us, of course, a prosperous treasury — the 
total receipts of 1819 having been $24,000,000-; collected, too, 
at a time when, as now, the number of unemployed workmen in 
each of our principal cities, counted by tens of thousands. — 
Suddenly, however, the scene changed — poverty of the people 
producing inability to continue the payment of contributions to the 
public treasury. The total revenue fell, in 1821, to $14,000,000, 
or little more than a third of what it had been, but five years pre- 
viously ; and the Treasury, but recently so rich, was reduced to the 
necessity of resorting to loans ; and that, too, in a time of pro- 
found peace ! — Such, Mr. President, was the result, so far as the 
Treasury was concerned, of the first free-trade experiment. 

The year 1828 having given us a really protective tariff, the 
following were the receipts of the Treasury, in the brief period of 
its existence : — 

Customs. Land. Total. 

1829 $22,681,000 $1,517,000 $21,198,000 

1830 21,922,000 2,329,000 24,251,000 

1831 24,224,000 3,210,000 27,434,000 

1832 28,465,000 2,623,000 31,088,000 

1833 29,033,000 3,967,000 33,000,000 



LETTERS TO THE 



Here, Mr. President, we have a steadiness, and regularity of 
movement, worthy of all admiration — each successive year gain- 
ing slightly upon its predecessor, and enabling the Treasury to 
command the respect and confidence of the world by the gradual 
discharge of debts contracted in time of war, and in the dis- 
astrous free-trade period, which had so closely followed the return 
of peace. 

The Compromise Act of 1833 repudiated the idea of protec- 
tion — the point provided to be reached by it, in 1842, having 
been that of a strictly revenue tariff, with a rate of duty limited to 
20 per cent. As before, land sales became large, and the total 
revenue of 1836 exceeded $48,000,000. As before, however, the 
apparent prosperity was followed by real adversity — the total 
receipts of the following years having been as follows : — 

1837 $18,000,000 1839 $30,000,000 

1838 19,000,000 1840 16,000,000 

The instability and irregularity exhibited in the period from 
181Y to 1822, are here, Mr. President, reproduced — the revenue 
mounting to 48, and then falling to 18 millions — then, again, 
going up to 30, to fall to 16 ; and all this, too, in the short period 
of five years ! Need we be surprised at seeing that, under such a 
course of action, the machine was shattered ? Is it wonderful, 
that the Treasury so entirely lost the confidence of those who had 
money to lend, as to have failed in all its efforts to negotiate a 
loan, either abroad or at home, and to have been compelled to 
resort to the use of irredeemable paper, as affording the only 
means at its command, for maintaining the government in exist- 
ence ? To all intents and purposes, it was bankrupt — such hav- 
ing been the result of the second free-trade experiment. 

The bankruptcy of the Treasury having produced another change 
of policy, and protection having been re-adopted, we find a resto- 
ration of order and regularity in the financial movement, as is 
shown in the following figures : — 

Customs. Land. Total. 

1843- 4 $26,183,000 $2,059,000 $28,242,000 

1844- 5 27,528,000 2,077,900 29,605,000 

1845- 6 26,712,000 2,699,090 29,406,000 

1846- 7 23,747,000 3,328,000 27,075,000 

The policy being once more changed, and the free -trade 
policy re-adopted, we find a repetition of the irregularity ob- 
served in both of the former free-trade periods — the total revenue 
having varied between 30 and 72 millions, and having fallen to a 
point so low, as to compel the government, one year since so rich, 
to solicit purchasers for the irredeemable paper, to the use of 
which it has now been driven. In the absence of demand for its 
commodity, it has been compelled to forfeit its engagements for 
the payment ol money — thus committing what, in the case of indi- 



PRESIDENT OF THE UNITED STATES. 



161 



viduals, would be held to be acts of bankruptcy. Such is the 
point, Mr. President, at which we have now arrived, in the third 
experiment of a policy based upon the idea that governments are 
instituted for the purpose of protecting themselves, and not the 
people for whose use they have been created. 

What, Mr. President, are the prospects of the Treasury for the 
remaining years of this experiment ? That we may be enabled to 
answer this question, we must first inquire into the prospects of 
the farmers and planters — the power to contribute to the public 
revenue, being wholly dependent upon the prices obtainable for 
the masses of raw produce, that the policy of the central govern- 
ment compels us to throw upon foreign markets. 

To enable us to predict the future, it is required, that we study 
the past. Doing this, we find, that each successive crisis has 
established a lower standard of prices for all our products — flour 
having declined steadily, until from $14, in 1816, it had, at the 
opening of the Crimean war, reached the point of $4.24; and 
cotton having declined from 25 cents, in 1816, to little more than 
6, in the period that followed the crash of 1842. As regards the 
first, we have already evidence of the existence of a state of things 
nearly correspondent with that of 1852; and yet, the hundreds 
of thousands of farms that have recently been created, throughout 
the West, have scarcely begun to supply the market. Let them 
begin, and let the seasons be propitious, and the prices of their 
products are likely to find a poiut lower than has ever yet been 
touched. As regards the second, we have, already, the following 
facts : first, the average export-price from 1852 to 1856, was only 
9 cents — having been lower than that of any free-trade period we 
ever yet have known ; second, the present price, with a crop no 
larger than that of 1849, is nearly as low as that average ; and, 
third, the power to produce cotton, with fair seasons, is now fully 
equal to a crop of 4,000,000 bales; or more, by 1,200,000, than 
the one that is now in market. Let that power be exercised, as 
we see it to have been, in the years that followed the last great 
crash, and we shall probably obtain a further confirmation of the 
general principle, that each successive financial crisis, conse- 
quent upon the adoption of the policy recommended by Brit- 
ish economists and manufacturers, establishes an average price, 
lower than that which had preceded it. That proving to be 
the case, as now appears very probable, it would seem quite 
clear, that our power to pay for foreign commodities, with the 
proceeds of either food or cotton, must be very small indeed. 
As regards the existence of any such power, resulting from the 
exports of manufactures, it is needed only that we remark the 
facts, that most of our mills are closed — that the proprietors are 
ruined — and that, there is little probability of their soon being 
opened. Gold — travelling, as it always does, in company with 
other raw materials — we shall, of course, export; provided we can 
11 



162 



LETTERS TO THE 



Ind the means to purchase it from Californian owners. Against 
that, however, there is a demand, for the payment of interest on 
debts contracted in the two free-trade periods, amounting to little 
less than $30,000,000 — constituting the first mortgage on oui 

exports. 

Our credit having disappeared, we can obtain no more good9 
than we can pay for, and that is little likely to equal $200,000,000, 
even if it exceed the $180,000,000 of 1850, when the customs 
revenue was $46,000,000. Since then, however, all duties having 
been reduced, while the free list has been much enlarged, the same 
amount of imports would, now, yield little more than $28,000,000.* 
Add to this a land revenue of $2,000,000, and we obtain a total 
of $30,000,000, as the probable receipts of a government, whose 
expenditures have already reached $70,000,000; and whose ten- 
dencies in the direction of increased expenditure are so very 
great, as to warrant the assumption, that they will speedily reach 
$100,000,000. 

These estimates of the amount of imports, and of revenue, differ 
widely, Mr. President, from those of the Secretary of the Treasury, 
who tells us, that "looking to our probable exports, the great 
resources of our country, its unexampled prosperity in many 
branches of industry, its capacity to recover from temporary pres- 
sure in its trade and business, the opinion is expressed, with some 
confidence, that the reduction from this cause will not exceed 
twenty-five per centum;" and, that the customs-revenue upon 
which we may securely calculate, will be $69,500,000. 

He who would predict the future, should be able to show that 
he had been able to anticipate the past. This, the honorable 
Secretary does not undertake to do. On the contrary, he admits, 
that the crisis had been "unforeseen;" and all his acts, as legis- 
lator, and as executive officer, from the opening of the session of 
1856-7, prove that he did not, in the slightest degree, anticipate 
the recent changes. Had he done so, he would, certainly, have 
opposed the passage of the tariff act of 1857. Had he done so, 
he would not, so recently as September last, have purchased at a 
large advance, certificates of public debt, the payment for which 
so completely exhausted the funds at his command, as to render 
it necessary to withdraw from the Mint, all the funds appropri- 
ated to its use. Neither would he have had to call upon Con- 
gress to give its instant attention to the work of authorizing an 
issue of irredeemable paper, as the only means of keeping the 
government afloat. All the facts tending, thus, to prove, that 
the Secretary could not, in the spring and summer of 1857, predict 



* The Secretary of the Treasury estimates the reduction of rates, effected 
by the recent tariff law, at 25 per cent. Adding to this the quantity of 
goods now freed from the payment of any duty whatsoever, we shall obtain 
a reduction of. more than a third. 



PRESIDENT OF Till: UNITED STATES, 



163 



the occurrences of the the autumn and winter that were to fol- 
low, I be<r, Mr. President, to ask — desiring, at the same time, 
to disclaim the slightest feeling of disrespect for your Cabinet 
Minister — what reason have we for believing, that the predictions 
of December, '57, are to be realized In '58, '59, or '60 ? There 
is, as it appears to me, none whatever. They cannot be realized. 

The crisis of '57 ought not to have been "unforeseen" — its ap- 
proach having been heralded by the same phenomena, that had 
been observed in 1836. It was not "unforeseen" by those who 
had taken the trouble to study these phenomena, and to satisfy 
themselves, that like causes always produce like effects. Not only 
w r as it foreseen, but its arrival was publicly predicted; and in a 
manner, too, that should have induced such a study of the facts, 
on the part of a finance minister, as would have resulted in satis- 
fying himself that the prediction could not fail, and that, too, 
speedily, to form a chapter in our financial history. 

There being, at present, no reason for believing that our power 
to pay for foreign merchandize will be greater than it was some 
years since, and our credit having wholly disappeared, there is no 
warrant for supposing that the revenue, for the next three years, 
can exceed $100,000,000 ; but, there is abundant cause for the 
belief, that the expenditures of those years will exceed $250,000,000. 
Under such circumstances, there would seem little reason for 
doubting that the scenes of 1842 — exhibiting a total failure of 
confidence in the ability of the Treasury to meet its engagements, 
accompanied by an almost exclusive dependence upon the use of 
irredeemable government paper — are likely soon to be repeated. 

How long, Mr. President, can such a system be maintained ? 
How long can the government continue to expend eighty millions, 
while collecting only thirty ? Is it not clear, that the road we 
are now travelling must end in bankruptcy the most complete ? 
Will not the conviction that such must inevitably be the case, 
force itself upon the money-lenders of Europe, as well as upon 
our own ? 

We are, however, assured by you, that, the national credit 
being high, loans can be effected on "advantageous terms." To 
me, the reverse of this would seem to be the case — the rate of 
interest paid by our Treasury being higher than that paid by any 
other community, claiming to be in possession of a regularly or- 
ganized and stable government. That rate is the true index to 
the confidence existing — the man of sober, industrious, and regu- 
?ar habits, always obtaining the use of money at rates far lower 
than those paid by gamblers and speculators, w T hose treasuries at 
one moment are overflowing, while at the next, they find them- 
selves in the usurer's hands. Judging from the fact, that the tri- 
vial amount of money which constitutes our present debt, was 
obtained only on the condition of paying interest at the rate of 
six per cent., our credit cannot be regarded as being very good. 



164 



LETTERS TO THE 



Should it be so, in face of the fact, that we are now again, and 
in a time of profound peace, compelled to resort to loans ? 

We pay higher interest than any community in the world, claiming 
to be held as civilized ; and this we do, in common with all the 
countries that follow in the direction indicated by England — ex- 
porting rude products, and taking pay therefor, in trivial quanti- 
ties of the same, returned in the form of finished commodities. 
Contrast, I pray you, Mr. President, our financial movements 
with those of France, and of all the countries that have followed 
her, in adopting the policy indicated by Colbert. Less than six- 
teen years since, the representatives of our Treasury were seen, 
and that, too, in a time of profound peace, knocking at the doors 
of all the bankers of Europe — seeking, in vain, to borrow a single 
dollar. Now, again, in time of peace, we find ourselves com- 
pelled to create a debt, the amount of which is likely, before the 
close of your administration, to exceed a hundred millions ; pro- 
vided, always, that it should prove possible to borrow that 
amount. France and Russia, on the contrary, have just passed 
through a war that has required enormous sacrifices of both men 
and money ; and yet, neither the one, nor the other, has had 
occasion to go beyond its own territory to obtain the supplies 
it needed. Shut out, by order of the Allied Powers, from all 
the principal money-marts of Europe, Russia maintained her 
credit so perfectly, that her five per cent, stocks never, even for a 
single moment, fell below the par. 

How would it be with us, Mr. President, in case of war, 
cut off, as we should be, from all our accustomed sources 
for revenue ; with our ports blockaded, and our customs officers 
unemployed ; with no demand for the rude products of the soil, 
and no demand for land ; with a frontier accessible to the enemy, 
almost twice as great as it was, before the government entered 
upon its career of centralization, now five-and-twenty years since ? 
Could we maintain our stocks at par ? Certainly not ! Abun- 
dant evidence would then be furnished of the accuracy of Johnson, 
when he declared that "extended empire, like extended gold, ex- 
changed solid strength for feeble splendor." Never, at any 
period of our national existence, has the central government been 
so entirely incapable, as now, of guaranteeing to the people of the 
various States, of the Atlantic and the Pacific, the secure enjoy- 
ment of the rights of person and property ; and yet, the expen- 
ditures of that government are five times greater than they were, 
when it first undertook to supersede the local authorities in the 
management of the currency. 

France, Germany, Sweden, and Russia, and all other countries 
that have adopted the protective policy, grow daily stronger, 
while we grow daily weaker. Why is it so ? Because, Mr. 
President, they appreciate the facts, that the first of all taxes is 
that paid to the trader and the transporter ; that those taxes 



PRESIDENT OF THE UNITED STATES. 



165 



take, therefore, precedence of the demands of government; and 
that the power of the latter to obtain revenue grows as the tax 
of transportation declines, and declines as that tax grows. Our 
government, on the contrary, closes its eyes to the existence of 
those facts. 

Consequent upon this, it is, that those governments seek to 
promote the power of combination, while ours is incessantly la- 
boring to destroy it; that the one seeks to give value to land, by 
facilitating the transfer of its products, while the other rejoices 
in the abandonment of land, and the emigration of its people ; 
that the one seeks to create demand for all the powers of man, 
while the other limits the demand to that brute faculty required 
for the rudest cultivation on the one hand, and trade on the 
other ; that the one would create a rich agriculture, while the 
other limits the business of its farmers and planters to the work 
of tearing out and selling the soil, and thus robbing the great 
treasury of nature ; and, that the one seeks to supersede the trader 
and transporter in the government of its people, while the other 
labors to enable the trader and transporter to supersede itself. 

The strength of all communities, Mr. President, increases in 
the ratio of the approximation of the prices of rude produce and 
finished products, In France, Germany, Russia, and throughout 
Northern and Central Europe, that approximation becomes, from 
year to year, more close ; and therefore is it, that serfdom is gra- 
dually disappearing, and that those communities grow in strength, 
wealth and power. In Turkey, Portugal, India, and Mexico, 
those prices are steadily receding, and hence it is, that they all 
decline in wealth and strength — that so little confidence is felt in 
their future — that men become less free, from year to year — and 
that they find it necessary to pay so large an interest, when they 
need to borrow money. So, too, is it with ourselves, and hence 
it is, that our Treasury pays always so high a rate of interest ; 
and, that among those by whom it has been directed, the belief in 
the necessity of man's enslavement has been a constantly growing 
one. Russia emancipates her serfs, at the moment when we are • 
agitating the re-opening of the African slave trade ! 

The more the subject is studied, the more, as I think, must it 
become apparent to you, that what we need is, not a reduction 
of the local powers, but such a reformation of the action of the 
central power, as shall make it harmonize with the ideas of your 
most distinguished predecessors. 

With great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, March lbth, 1858. 



166 



LETTERS TO THE 



LETTER TWENTY-NINTH. 

(conclusion.) 

Our public warehouses, Mr. President, are filled with foreign 
merchandise, always ready to supply the material of auction sales. 
Our auctioneers are constantly at work, supplying the wholesale 
and retail dealers, at prices fixed by themselves. Our shops an 
gorged so thoroughly, with foreign food and labor in every form, 
from the coarsest woollens to the finest silks, as to leave no place 
for the domestic food and labor that seek a market. Such is the 
mode of ' ' warfare, ' ' by means of which ' ' the most wealthy capi- 
talists 11 of Britain " are enabled to overwhelm all foreign compe- 
tition in times of great depression, and thus to clear the way for 
the whole trade to step in, when prices revive, and to carry on 
a great business, before foreign capital can again accumulate to 
such an extent, as to be able to establish a competition in prices 
with any chance of success.'' 1 Such, Mr. President, is the sort 
of warfare, by means of which Ireland and India have been ruined, 
without the necessity for firing a gun, or drawing a sword. Such 
is the warfare against which your fellow-citizens, for ten years 
past, have sought, but vainly sought, to be protected — the only 
answer to their petitions having been, that the duties of the govern- 
ment were limited to the task of protecting itself, leaving the peo- 
ple to protect themselves as they could. 

As a consequence of this it is : that after a growth of pauper- 
ism, steadily continued during the last ten years, we find it sud- 
denly so much expanded, that hundreds of thousands of our peo- 
ple are wholly unable to sell their labor, or to purchase food and 
clothing : 

That factories, mills, mines, and furnaces, the cost of which has 
counted by hundreds of millions of dollars, are now closed, and 
likely so to remain : 

That the power to diversify the employments of society declines 
from day to day : 

That, simultaneously therewith, we add to our population a 
million of persons annually : 

That, the necessity for resorting to the labors of the field, as 
affording the only means of support, steadily increases : 

That the supply of food tends, therefore, to augment, as the 
domestic consumption declines : 

That its price tends, therefore, steadily to fall, and is likely now 
to be lower than has ever yet been known : 

That the farmer, thus deprived of the ability to develop the 
powers of his land, is more and more forced to limit himself to 



PRESIDENT OF THE UNITED STATES. 167 



the work of robbing the earth of its soil, to be sold in distant 
markets : 

That the competition thus produced, for the sale of food, is 
most injurious to the farmers of Continental Europe : 

That the latter are thus deprived of the power to purchase cotton, 
the price of which, with favorable seasons, is likely to fall to a 
lower point than has ever yet been reached : 

That the rewards of agricultural labor must, therefore, steadily 
decrease, as the necessity for resorting to the labors of the field 
increases : 

That with every step in this direction, both farmer and planter 
become more entirely dependent upon the mysterious changes of 
foreign markets — prices rising, or falling, as consequences of acts 
over which they can have no control whatsoever : 

That under such circumstances, agriculture must become, with 
each successive year, more gambling in its character : 

That the rewards of productive industry must diminish, as the 
temptation to engage in gambling and speculation becomes greater, 
from year to year. 

That the proportion of the population acting as middlemen, in 
the various capacities of trader and transporter, lawyer and poli 
tician, office-hunter and office-holder, must continue to increase : 

That the taxes of the trader and transporter must steadily aug- 
ment, as the powers of the land decline : 

That as that taxation grows, the necessity for further dispersion 
of the population, with growing necessity for further roads, must 
steadily increase : 

That, the greater the dependence on roads and ships, the less 
must be the power to command the use of efficient ships and roads : 

That the dependence of the farmer and the planter upon the 
city trader, and that of the country at large upon the bankers of 
Europe, must become greater from year to year : 

That the power of commanding the services of the precious 
metals must steadily diminish : 

That commerce at home must decline, as the dependence on 
foreign markets increases : 

That growing dependence upon the trader, and constantly in- 
creasing instability in the societary action, must be attended by 
constant diminution in the feeling of responsibility, and as con- 
stant increase in the demoralization that, with each successive day, 
becomes more clearly manifest : 

That the waste of power, now so great, must steadily increase, 
with constant decline in the ability to produce the commodities 
required for consumption : 

That the ability to maintain the local institutions must continue 
to diminish, and the necessity for further additions to our terri- 
tory must as regularly increase : 

That the expenditure of the Federal government must be a con- 



168 



LETTERS TO THE 



stantly augmenting quantity — the needs of the Treasury growing 
as the powers of the people decline : 

That bankruptcy of the state must follow, as a necessary con- 
sequence : 

That constantly growing discord among the States must ulti- 
mately annihilate all confidence in, and all desire for, the main- 
tenance of the Union : and 

That, with each successive year, it must become more obvious, 
that the day is fast approaching, when " the republics of Greece, 
Rome, and America, are to stand together among the ruins of the 
past." 

Such, Mr. President, has been the tendency of affairs, for the 
quarter-century that has elapsed, since the Federal government 
undertook the management of the currency — the only difference 
between the picture here presented, and that required for presen- 
tation of the period from '31 to '42, being, that the shades de- 
manded by the present, are far deeper than those needed for the 
past. Then, centralization had but just begun to show itself. Now, 
it is fast becoming universal. Till then, the right of the States 
to control their local institutions, had scarcely at all been ques- 
tioned. Now, the central power controls the municipal elections, 
and menaces with extinction, the local rights. More progress 
having been made, in this direction, under your immediate pre- 
decessor, than had been made in the preceding five-and-twenty 
years, that of each successive year is likely, should our present 
policy be maintained, to be greater than that of the five years 
through which we last have passed — the progress of man, in 
whatsoever direction, good or bad, being one of constant acce- 
leration. 

Why, Mr. President, should such things be ? Why is it, that 
when, as you have told us, ' ' the earth has yielded her fruits abun- 
dantly, and has bountifully rewarded the labors of the husbandman" 
— when "our great staples have commanded high prices," and 
when we "have possessed all the elements of material wealth in 
rich abundance" — that our "monetary interests" are in the 
" deplorable condition" you have so well described ? "Why is it, 
that "in the midst of unsurpassed plenty in all the productions 
of agriculture and in all the elements of national wealth, we find 
our manufactures suspended, our public works retarded, our 
private enterprises of different kinds abandoned, and thousands 
of useful laborers thrown out of employment, and reduced to want ?" 
Why is it, that "the revenue of the government, which is chiefly 
derived from duties on imports from abroad, has been greatly 
reduced, whilst the appropriations made by Congress at its last 
session for the current fiscal year are very large in amount ?" 

Seeking a reply to these questions, we are met, at once, by the 
fact, that they are precisely those which were asked in '22 and '42, 
. Jie former free-trade periods ; but directly the reverse of those which 



PRESIDENT OF THE UNITED STATES. 



169 



might have been asked in 1817, in 1835, and in 1841, the closing 
years of the three periods in which it had been held, that it was 
among the duties of a government to protect its people, and that 
when it failed to do so, they would be governed from abroad — 
the home government being superseded by a foreign one, as is now 
so much the case. 

Seeking abroad a further answer, we find the people of France 
profiting largely by increase in the value of the products of the 
land, and of the land itself. Turning towards Denmark and Ger- 
many, we find the serfs of the last century to have been replaced 
by hundreds of thousands of small proprietors. Looking to 
Russia, we are met by decrees, in virtue of which, serfdom has 
already ceased throughout a large portion of the empire, and 
must speedily cease in all. In all of these, the State becomes 
stronger and more self-dependent, from year to year; whereas, 
with us, it becomes weaker and more dependent. 

Why should there be such differences ? Because, the policy of 
all those countries tends towards the promotion of domestic com- 
merce, and towards the substitution of the power of the govern- 
ment for that of the traders and transporters — the former find- 
ing its strength increase with the growing wealth and power of 
the people, and the latter rejoicing in their poverty and weakness. 
We, on the contrary, are gradually, but certainly, transferring the 
powers of the government to the hands of those who profit by 
trade and transportation, and who, therefore, rejoice in destroying 
the power of association and combination. Hence it is, Mr. Pre- 
sident, that we, who claim to be the especial friends of freedom, 
are constantly seeking the extension of slavery, while the despots 
of Europe are as constantly engaged in striking the chains from 
their subjects' limbs. 

What we need is, the adoption of measures tending towards 
limitation of the power of taxation exercised by foreign and 
domestic traders and transporters, by which the value of land and 
labor is now destroyed. Such was the tendency of the act of 
August, 1842, which came into existence when commerce had 
almost ceased, when bankruptcy was almost universal, and when 
confidence in man, in banks, in States, and in the Federal Treasury, 
had nearly perished. Scarcely had it become a law, when com- 
merce once more started into life, confidence was restored, and 
hope in the future was found taking the place of the despair, that 
previously had been so nearly universal. Why was this ? Because 
; t had for its objects,the diversification of the demands for labor, 
the facilitation of combination, the extension of commerce, and 
the economizing of human power. It gave us, Mr. President, 
that sort of free trade, that, as you have clearly seen, we so greatly 
need — freedom of intercourse between man and man, town and 
town, county and city, State and State. That commerce we now 
have not, nor can we have it, while the policy of the Federal 



1T0 



LETTERS TO THE 



government shall continue to be in accordance with the desires of 
the people who seek to have raw materials cheap, and finished 
commodities dear, and find, in enormous capitals, the most useful 
of all the instruments of warfare required for depriving the nations 
of the world, of all power for maintaining direct intercourse with 
each other. 

Restore the act of 1842, Mr. President, and a demand foi 
labor will arise — relieving us of all further necessity for perusing 
the shocking accounts of poverty, despair, crime, and death, with 
which our journals are now filled. Let it be restored, and mills 
and furnaces will at once be re-opened — making demand for 
labor, food, and raw materials, and checking decline in the prices 
of corn and cotton. Let it be restored, and your second Message 
will present a picture of prosperity among the people, and strength 
in the State, directly the reverse of the exhibit of poverty in the 
one, and weakness in the other, offered by your first. 

Why can it not be restored ? Because the generally dominant 
party — failing to see that the sort of free trade we really needed, 
was the one you have yourself so well described — has, for more 
than twenty years, repudiated the ideas of our revolutionary fathers, 
and of all our presidents from Washington to Jackson ; and, 
having done so, must now repudiate all change. That it may 
maintain its consistency, it is required that we continue to pursue 
a policy that has been repudiated by all the advancing nations of 
Europe, and that has, wherever tried, here or elsewhere, resulted 
in bankruptcy and ruin. That it may be maintained, we must 
continue to exhaust our land ; we must continue to pay a tax of 
transportation, greater than would be required for maintaining 
millions of men in arms ; we must continue to waste capital capa- 
ble, if properly applied, of more than doubling our productive 
power ; we must continue to see our people perish, in default of 
power to find purchasers for their labor ; we must continue to see 
capital acquire power at the cost of labor ; we must continue 
and extend, the necessity for seeking public employments ; we must 
continue to enlarge our territory, and with it, the necessity for 
fleets and armies ; we must continue to augment the power of the 
central authorities, at the cost of the local ones ; and finally, we 
must proceed onward in a course leading, and that inevitably, to 
the downfall of the system established by the men who achieved the 
Revolution, and who made the Constitution of 1789. 

Those, Mr. President, who advocate further progress in that 
direction, can have little idea of the terrific responsibility that 
attaches itself to the administration of the affairs of nations, 
[f it is a crime to take the life of a single man, what must it 
be, to subject millions of people to a policy leading inevitably to 
poverty, despair, and death? — If seduction is a crime, what, Mr. 
President, is the criminality of those who, for party purposes, ad- 
vocate the maintenance of a system which, by destroying the 



PRESIDENT OF THE UNITED STATES. 171 

demand for female labor, leaves to tens, even if not hundreds, of 
thousands of our women, no choice but that between prostitution 
on the one hand, and starvation on the other ? 

It is time, that those charged with the administration of our 
affairs, should waken to the knowledge, that protection to the people 
is, in fact, protection to the government itself. The policy which 
transfers to foreign merchants and foreign States, the power of 
taxation, must result in bankruptcy of the treasury, ruin of the 
people, and downfall of the government. So it has always been, 
and so must it ever be. 

The rock upon which our ship is likely, Mr. President, to be 
wrecked, is that of trading and political centralization — the last 
a necessary consequence of the first. The more the policy of the 
country tends towards augmentation of the tax of transportation, 
the more rapid becomes the motion of our ship in the wrong 
direction, and the nearer approaches the day of wreck. You, Mr. 
President, are our pilot, and if we are to avoid the rocks, it is 
for you to change the direction of the helm. If that be not done, 
the story of our Union will stand before posterity, as presenting 
the most remarkable case of shipwreck recorded in the annals of 
the world. 

Hoping, that under your pilotage, the course may be changed, 
and that the period of your administration may stand upon the 
record, as the one in which the policy of fostering domestic com- 
merce as the true foundation of an extended intercourse with 
foreign nations, had been definitively adopted, I remain, Mr. Pre- 
sident, with many apologies for my repeated trespasses upon your 
time and attention, 

With great respect, 

Your obed't servant, 

Henry C. Carey. 

Philadelphia, March 11th, 1858. 



THE END. 



THE 



FRENCH AND AMERICAN TARIFFS COMPARED 



IN A 



SERIES OF LETTERS 



ADDRESSED TO 



Mons. MICHEL CHEVALIER, 

MEMBER OF THE COUNCIL OF STATE, ETC. ETC. 



BY 

HENRY C. CAREY. 



COLLINS, 



PHILADELPHIA: 
PRINTER, 705 JAYNE 
1861. 



STREET. 



LETTERS TO MONS. MICHEL CHEVALIER. 



LETTER FIRST. 

My dear sir : 

At the close of our last interview, now little more than two 
years since, you did me the favor of presenting me with two 
reports which had just then been made to the Council of State, 
in reference to a proposed consolidation, in the form of law, of 
sundry decrees by which changes had been made in the conditions 
upon which foreign merchandise might be received in France — 
the two subjects therein specially referred to being the duties on 
long wools, and upon iron pipes. The committees had been com- 
posed of gentlemen distinguished by their familiarity with the 
needs of agriculture and of commerce, and with those of the pub- 
lic works. At their head had been placed the most confidential 
of all the advisers of the emperor, the government thus manifest- 
ing its sense of the extreme importance of the questions to whose 
examination their attention had been invited. On his part that 
sense was manifested by his constant presence, and by his own 
most careful examination of witnesses with a view to satisfy him- 
self in regard to the one great question which appears to have 
been ever present in his mind — that of the absolute necessity for 
maintaining the duties at such rates as should be fully and com- 
pletely protective of that great domestic industry which, under a 
system even more thoroughly protective than that of Great 
Britain had ever been, had given to France a foreign commerce 
four times greater than had existed thirty years before, and had 
added so largely to the value of the land and labor of the em- 
pire. At every stage of the examination, the views of the com- 
mittees, and most especially those of their presiding officer, 
appear to have been in entire accordance with those so well 
expressed by yourself in one of your most recent works — your 
readers having there been told — 

That " every nation owed it to itself to seek the establishment 
of diversification in the pursuits of its people, as Germany and 
England had already done in regard to cottons and woollens, 



4 



LETTERS TO MONS. MICHEL CHEVALIER. 



and as France herself had done in reference to so many, and so 
widely different departments of industry 

That " when it failed to do so it made a great mistake :" 

That " combination of varied effort was not only promotive of 
general prosperity, but was the one and only condition of national 
progress ;" and, • 

That to favor the production of such combination was not only 
"not an abuse of power on the part of the government," but 
was, on the contrary, the mere " accomplishment of that positive 
duty which required it so to act, at each epoch in the progress of 
the nation, as to favor the taking possession of all the branches 
of industry whose acquisition was authorized by the nature of 
things;" governments being, in your view, "only the personifica- 
tion of nations, and it being required of them that they should 
exercise their influence in the direction indicated by the general 
interest properly studied and fully appreciated." 1 

Than this, nothing as I conceive could be more accurate, it being 
a full indorsement of the views of that first of all the statesmen the 
world has yet produced, your countryman Colbert. Hume urged 
upon the nation the necessity for such a course of action as should 
"preserve its people and its manufactures." The essential object 
of Adam Smith's great work was the enforcement upon his coun- 
trymen of the idea, that development of the domestic commerce 
was the necessary prelude to an advantageous foreign trade. J. B. 
Say taught his hearers that "protection granted with a view to 
promote the profitable application of labor and capital, might be 
productive of universal benefit." Blanqui assured his readers that 
past experience had proved " that a people ought never to deliver 
over to the chances of foreign trade the fate of its manufactures." 
Rossi held it to .be undeniable that there were exceptions to 
the free trade principle, and that "in the conduct of a nation," as 
in that of a family, sacrifices needed to be made in the hope of 
thereby opening " new roads to affluence." Following in the same 
direction, Mr. J. S. Mill arrived at the conclusion, that indivi- 
duals should not be expected at their own risk, or rather certain 
loss, to introduce new branches of manufacture, or " to bear 
the burden of carrying them on until workmen should have been 
educated to the level of those with whom the processes had be- 
come traditional ;" and that, therefore, protective duties might be 
resorted to as the least inconvenient mode of trying such experi- 
ments. So far, all these distinguished teachers have been certainly 
in the right, but in the enunciation of their views .there has gene- 
rally been exhibited a timidity which contrasts most unfavorably 
with your own frank and manly indorsement of the idea, that " in 

1 Examen du Systeme Commerciale connu sous le nom du Systeme 
Protecteur. Paris, 1852, pp. 34 to 38. 



LETTERS TO MONS. MICHEL CHEVALIER. 



5 



every country, the day of maturity having arrived, there arises a 
necessity in the interests even of civilization for acclimating among 
its people the principal branches of manufacture," and that its 
government is then " well inspired when seeking the establish- 
ment, among its people, of diversity in the demand for human 
service" — that diversity being "favorable to the advancement of 
knowledge," and altogether in harmony with the capabilities of 
widely extended territories like those of France, Germany, and 
the United States. 

French practice, as shown in the proceedings of the Council of 
State, of which you are yourself so influential a member, and your 
own teachings, as well as those of the distinguished economists to 
whom I have referred, being thus in such perfect harmony with 
each other, it was with great surprise I read, shortly after the 
interview above referred to, that you were then arranging the terms, 
of a treaty with Great Britain in which the free trade doctrines, 
so pertinaciously urged by that country on the world's acceptance, 
were to be reduced to practice. That such should prove to be the 
case appeared to me to be entirely incredible, and glad was I, 
when the treaty came, to find that I had been right, its essential 
characteristic^ having then proved to be : — 

I. A resolute assertion of efficient and complete protection, at 
whatsoever cost of revenue : 

II. A nicety of discrimination with a view to meet the actual 
needs of French industry, such as is almost without a parallel 
in the world : 

III. A determination to render the collection of those duties 
certain, manifested by the almost universal rejection of the ad- 
valorem system provided for in the former free trade treaty with 
Great Britain, when France was flooded with British manufactures, 
invoiced at a third or even a fourth of their real value ; and 

IY. A determination to secure to French industry a full sup- 
ply of raw materials, manifested by a great reduction of the 
duties upon them, even where they had not been entirely abol- 
ished. 

To call a tariff so distinguished a free trade one, in the British 
sense of the word, would be a manifest absurdity— there being no 
■ single part of it that is not in perfect accordance with the assur- 
ance given to his countrymen, some few years since, by Mons. 
Baroche, then President of the Council, that while it was proposed 
to abolish " antiquated prohibitions," the government had de- 
termined that the principle of protection should be firmly and 
steadily maintained. That of free trade, as he further told them, 
had been formally rejected, as incompatible with the independ- 
ence and security of the nation, and as likely to be destructive 
of its noblest manufactures. The decision of the Council then 
announced, has now, as we see, taken the form of law, by means 



6 



LETTERS TO MONS MICHEL CHEVALIER. 



of a treaty to which your name is not attached, but which is said 
to have been mainly negotiated by yourself, and in which your 
own principles are so fully carried into practice as to warrant the 
admiration of all who believe in the necessity for bringing the 
plough, the loom, and the anvil, to work together. 

Under a system of protection more efficient and more steadily 
maintained than any other the world had seen, your countrymen 
had placed themselves at the head of the commercial communities 
of the world, their exports having grown from an average of 
500,000,000, in the period from 1825 to 1836, to 1,900,000,000 
in 1856, and five-sixths probably of that vast amount being com- 
posed of the products of their own soil, so condensed in form, 
agreeably to the ideas so admirably propounded by Adam Smith, 
as to enable the food, the wool, the rags, the silk, the fuel, and 
the ore, to travel cheaply and freely to the remotest corners of the 
world. 1 Under that system land and labor had much increased in 
value, while the government had greatly increased in strength, 
power, and influence. Nevertheless, firm as were the founda- 
tions upon which then rested the whole of that industrial system 
for which the country had been indebted to the protective policy 
inaugurated by Colbert, you, my dear sir, had deemed it neces- 
sary still to maintain protection at such a point as would give 
to your own people the entire control of their domestic market. 
Such having been the case, the friends of protection here had 
reason, as they thought, for supposing that our recent re-adoption 
of the protective principle, would meet with your entire approval, 
as a measure calculated to increase the productiveness of our agri- 
culture — to give value to American land and labor — and to increase 
our power to contribute to the comfort, convenience, and pros- 
perity of your countrymen. So much the reverse of this, how- 
ever, has been the case, that we find in recent journals, in the 
report of proceedings at the Dublin meeting of the Social Science 
Association, a denunciation of the tariff of the present year, in the 
following words : — 

" As you are all here practical men, seeing with pleasure and thank- 
fulness the good which appears, but not shutting your eyes to avoid 
perceiving the evil, by the side of those happy changes which are under 
accomplishment or in preparation, you will not fail to observe the facts 
which are taking place in the opposite direction. It is thus that by the 
side of the treaty of commerce between France and England your glance 
is arrested with pain by the Morrill tariff, which the Northern United 
States have recently adopted. But the Morrill tariff is born of the war. 



1 The exports of what is called British merchandise are larger in 
amount, but they are almost entirely composed of food . and other 
raw materials brought from other parts of the world, to be converted. 
Great Britain stands at the head of trading nations, but France is chief 
of the commercial ones. 



LETTERS TO MONS. MICHEL CHEVALIER. 



1 



It is the child of discord. It will not live. The atmosphere of the nine- 
teenth century will stifle it ; for the atmosphere of the nineteenth cen- 
tury only suits products of another nature, of a more regular character, 
more conformable to the laws of harmony, and to the unconquerable 
want which the nations feel to interchange the fruits of their labor. One 
of the finest sciences that man has formed, Geology, teaches and proves 
to us that in proportion as during the series of the ages of the earth the 
atmosphere purified itself and was tempered, there were seen to appear 
more perfect creatures. The animals of the first times, those monstrous 
and hideous beings of which the forms, recovered and described by 
learned men, astonish and terrify us, gave place to animals less strange 
and more beautiful, of an organization more elegant and more refined. 
The Morrill tariff is like one of those ugly beasts, such as the Anoplothe- 
rium, or the Plesiosaurus, which one should attempt to rear upon the 
earth such as it is to-day. Vain attempt ! Powerless effort ! The Mor- 
rill tariff is destined soon to perish in the midst of the confusion of its 
authors." 

That you fully believed all this, no one, my dear sir, who has 
had the pleasure of knowing you, can even for a moment doubt. 
That, however, you have wholly misconceived the character of the 
measure thus denounced — that it is far less protective, and there- 
fore far less in accordance with your own most excellent teachings, 
than is that one of which you are said to be the author — that it is 
far more of a mere revenue measure than you yourself might wish 
it should be — that it totally fails in that nicety of discrimination 
by which your own is so much distinguished — that it, therefore, 
throws far less difficulty in the way of international exchanges — 
that it abounds in those ad valorem duties by which protection 
is rendered less efficient — that that efficiency is still further dimi- 
nished by the retention of more and heavier duties on raw ma- 
terials — I propose to show, in another letter, fully convinced 
that, as a lover of truth, you will gladly receive the correction, and 
as gladly aid in disabusing the public mind of Europe in reference 
to the charge so often made, that the North had sought to profit 
of the present disturbances by giving to the world a tariff monster 
of which it had reason to feel ashamed. 

Meantime, my dear sir, I pray you to accept the assurance of 
the sincere respect with which I remain, 

Yours, faithfully, 

HENRY G. CAREY. 

Mons. Michel Chevalier. 
Philadelphia, October 26, 1861, 



8 



LETTERS TO MONS. MICHEL CHEVALIER. 



LETTER SECOND. 

Dear Sir : 

As preparatory to the examination above proposed, I now 
ask your attention to the following comparative view of the duties 
payable under the Morrill tariff — the character of which you have 
so exceedingly misconceived — and that Reciprocity tariff, which 
you regard as likely so much to "benefit both France and the 
United Kingdom," and as ultimately " destined to metamorphose 
the custom-houses of the world." 

French duties under 





Quanti 


the Keciprocity 


U. S. duties under 


Names of Articles. 


ties. 


treaty in American the Morrill tariff. 






Money. 




Iron, pig, and old cast iron 


ton. 


$4 39 


$6 00 


Iron, old broken wrought . 


ton. 




fi no 


Iron, bar ..... 


ton. 


13 68 


15 00 


Iron, railroad .... 


ton. 


13 68 


12 00 


Iron, sheet .... 


ton. 


25 41 to $31 28 


20 to $25 


Iron manufactures ; pipes and 








solid columns 


ton. 


8 30 


11 20 


Iron manufac. ; heavy wrought 


ton. 


17 58 


20 00 


Iron manufactures ; small wares 


ton. 


29 32 


22 40 


Iron manufactures ; cut nails . 


cwt. 


97fc. 


1 12 


Iron manufactures ; wr't nails 


cwt. 


1 46£ 


2 24 


Iron manufactures ; anchors, 








chains, cables 


ton. 


19 54 


30 to $33 


Iron manufactures ; tubes of 








wrought iron, large 


ton. 


25 40 


44 80 


Iron manufactures ; tubes of 








wrought iron, small 


ton. 


48 85 


44 80 


Steel in bars of all kinds . 


lb. 


1 3-10c. 


1 £ and 2 c. 


Steel in sheets above l-12th of 








an inch thick 


lb. 


2c. 


2 c. and 15 °® c. 


Steel in sheets under l-12th of 








an inch thick 


lb. 


2fc. 


2J and 15 f c. 


Steel tools in pure steel . 


lb. 




30 ^ cent. 


Steel sewing needles 


lb. 


8| to 17|c. 


20 cent. 


Steel pens ' 


lb. 


8-c. 


30 ^ cent. 


Steel cutlery .... 


lb. 


20 cent. 


30 $ cent. 


Steel firearms .... 


lb. 


21c. 


30 ^ cent. 


Tin, pure beaten and rolled 


ton. 


11 72 


10 $ cent. 


Tin, pots and pans . 


ton. 


58 62 


56 00 


Lead, pigs, bars, plates 


ton. 


5 86 


22 40 


Lead, in sheets 


ton. 


9 77 


33 60 


Plated manufactures of all kinds 


ton. 


195 45 


30 ^ cent. 



LETTERS TO MONS MICHEL CHEVALIER. 



9 



Quanti- 
ties. 



lb. 



ton. 
ton. 

lb. 
ad val. 

lb. 



Clocks and watches . 
Clocks and movements 
Ores, iron, copper, zinc, lead, tin 

nickel . 
Locomotive engines . 
Spinning machines . 
Leather, prepared skins, morocco 
Leather manufactures 
Refined sugar . 
Molasses . 

Linen, plain, unbleached, (7 
grades) 

Linen, bleached, dyed, or printed 

(7 grades) 
Cotton tissues, plain, twilled ") 

ticks, unbleached, weigh- > 100 sq. yd 

iog 3J oz. or more to sq. yd. J 
Cotton "tissues, weighing 2 to 3} 

oz. to sq. yd. . . lOOsq.yd 
Cotton tissues, weighing 

oz. to sq. yd. 
Cotton tissues, bleached, add to 

unbleached . 



French duties under 

the Keciprocity U. S. duties under 
treaty in American the Morrill tariff. 
Money. 

5 ^ cent. 30 f cent. 

9c. 15^ cent. 



lb. 



lb. 



to 2 

100 sq. yd. 



Cotton tissue, printed 

Raw cotton 
Flax and hemp 
Wool, unmanufaetured 

Tissues of pure wool 

Silk in cocoons 
Silk tissues, hosiery, lace, pure 
India-rubber wearing apparel 
India-rubber boots and shoes 
Cordage, cables, fish-nets . 
Beer, in addition to internal tax 
Glassware and table glass 
Window glass, plain, plate, un 

polished 
Glass, cut 



ad val. 
ton. 



free 
$29 32 
29 22 
22 

10 ^ cent. 
3£ cts. 
1 1-5 cts. 

2£ to 35 cts. 

3£ to 47 cts. 

$1 

2 cts. 

i ct. 

15 ^ cent. 

15 cent. 

free 
$9 77 
free 



ad val. 15 ^ cent. 



lb. 
lb. 
lb. 
gal. 
lb. 

lb. 
lb. 



free 

free 
15 c. 
7| c. 
2ic. 
1-c. 

3^8 c. & 10 



$33 60 
30 %Q cent. 
10 to 30 ^ ct. 
30 $ cent. 
2 cts. 

2 cts. ^ gal. 
25 cent. 
30 ^ cent. 
$1 

$2 to $3. 

4 00 

add |c. sq. yd. 
f addtobl'ch'd 
\ 10 %> ct. 
free 

$10, $15, & $35 

3 and 9 cts. 
f25, 30 ct., 

1 12c.%Hb., 
( and 25 ^ ct. 

free 

25 and 30 ct. 
20 and 25 ct. 
20 cent. 

2 and 3 cts. 
15 c. 

ct. 25 cent. 



3.8 c. &10^ct. lto4c. sq. foot. 
3.8c.&10^ct. 30^ cent. 



The British free-trade policy looks to maintaining the Custom 
House system as a permanent source of revenue. Your Council 
of State, wholly rejecting the question of revenue, decided to have a 
tariff that should, in accordance with lessons that you yourself 
had taught, stimulate domestic commerce, and thereby give to 
labor and land that increase of value to which alone they could 
look for power to support the burden of direct taxation. Pre- 
cisely such a tariff as that they asked for, is presented to us in 
the one a portion of which is given above — the idea of revenue 



10 LETTERS TO MONS. MICHEL CHEVALIER 

being most rigidly excluded, and that of protection being never 
in any manner allowed to be vitiated by it. Pig iron — which 
has in France the character of a raw material, sufficient domestic 
supplies of which can scarcely be obtained — and pipes — are ad- 
mitted at a rate of duty rather lower than our own, whereas 
on finished commodities into which the pigs can be converted, 
they are materially higher. Thus, railroad bars pay $13.68 
against our $12, while sheet iron, as employing more labor 
than the bars, pays six times as much as pigs, and one-fourth 
more than is paid, under the Morrill tariff. On steel, generally, 
the duties are about on a par with ours, while the raw material 
required for its manufacture is admitted at a lower rate than here. 
On cutlery 20 per cent, appears to have been regarded as sufficient, 
whereas 30 per cent, has been so regarded here. Tin is lower 
than with us, but manufactures of tin are higher — the protective 
principle being every where most effectually carried out. Plated 
wares are in effect prohibited. The charge on locomotives 
nearly resembles our own. Linen manufactures are higher, while 
flax and hemp are admitted at greatly lower rates of duty. The 
Morrill tariff increases the rates on cotton directly in the ratio of 
their fineness, which properly meets the condition of the manufac- 
ture here ; whereas you, my dear sir, to meet a very different 
condition of things, put a duty of one cent per square yard upon 
the coarsest unbleached, and only one-seventieth of a cent per 
square yard on the very finest. This, of course, is because your 
countrymen can safely defy competition in the most delicate tex- 
tures, and need only to resist the English importations of the 
coarsest. Again : in the matter of printed cottons, instead of 
running up an arithmetical climax of duties upon the unbleached, 
colored, and printed, of all grades of fineness and labor cost, as 
is the case in our tariff, yours fits your own industrial conditions 
by heavy duties on the lowest and the highest in our scale, while 
guarding the prints, as it does the coarse unbleached, by an amply 
protective rate, but leaving the finer intermediate unprinted goods, 
in which England cannot rival them, nearly exempt from duty — 
protection ruling the rates everywhere, without regard to valuation. 

On glassware, mirrors, and plate, 3 8-10 cents per pound and 
10 per cent, must give the most complete protection against Eng- 
land, notwithstanding her late improvements. Glass showing 
its qualities clearly, the fine products of France are in no danger 
of being matched in market price by inferior goods. As in the 
case of cutlery, the purchaser can judge of what he buys, and the 
best article of the kind will hold the market against all rivalry. 
Again, on cordage and cables — the average of duties in your 
tariff is as high as in ours — the rates of duty here, as throughout 
the schedules, being in the measure of the threatened competition — 
always protective, and never turning aside for any other object. 



LETTERS TO MONS. MICHEL CHEVALIER. 



11 



Having studied all these facts, you will, as I feel assured, admit 
that you have been entirely misled in regard to the Morrill tariff, 
and that it is, so far as regards the sacrifice of revenue to protec- 
tion, infinitely less perfect than is your own. 

Coming, now, to the second point to which I have desired to 
invite your attention — that of the nicety of classification required 
for giving to each and every branch of manufacture the precise 
protection that it needs — we find the only case of the kind in the 
Morrill tariff to be that of cottons, and that even there the discrimi- 
nations are absolutely as nothing when compared to those of the 
one to which you point as likely to produce a revolution in the 
commercial system of the world. Linens are by us disposed of in 
two short lines, and both of these are ad valorem. Woollen 
yarns have three lines where you have no less than thirty-six ; and 
the only counting of threads that is required by us is that of four 
qualities of cotton, with a variety of duties as easy of calculation 
as is the counting of your fingers. Our whole tariff is, indeed, 
simplicity itself when compared with the classification of your own, 
in which there are no less than one hundred and forty kinds of 
cotton yarn, each with its separate rate of duty 1 Flax and hemp 
yarns, single unbleached, single bleached or dyed, and twisted un- 
bleached, twisted bleached or dyed, are put into twenty -four classes, 
and under as many different rates of duty. Linens have twenty- 
four descriptions, determined by the number of threads, ranging 
from 8 to 24 threads to five square millimetres — these varieties 
being run through the several conditions of unbleached, bleached, 
printed, and figured, with the duties varied in every case; the lowest 
at 30 francs and the highest at 535 francs per 100 kilogrammes 
(220 pounds avoirdupois). Jute yarns and tissues stand in the 
tables in equally numerous descriptions and varied duties; and in 
cottons the classification is carried to the extent of providing dif- 
ferent rates for fifteen qualities of single unbleached yarns, fifteen 
of bleached, fifteen of dyed, forty-five kinds or qualities of twisted 
in two strands, two kinds of yarn of three threads, and forty -five 
kinds of warped yarns, with the duties varied, according to fine- 
ness, as has been already said, no less than 140 times — beginning 
with ten centimes and rising to no less than three francs per kilo- 
gramme, or about one-quarter of a dollar per pound. Of the cotton 
tissues, I have given in the table only the coarsest, the medium, 
and the finest qualities. In the schedule there are eight qualities, 
the description of one of which will serve as a specimen of the 
whole. It reads thus : "Cotton tissues weighing 11 kilogrammes 
or more the 100 square metres, of 35 threads or less to the 5 square 
millimetres, 50 centimes per kilogramme." Had any such dis- 
crimination been attempted here, we should have been assured tha - ' 
the object of the framers of our tariff had been the utter annihila- 
tion of international intercourse, and there would have been a howl 



12 



LETTERS TO MONS. MICHEL CHEVALIER. 



among our British free traders such as could have found no parallel 
in the history of the world since the establishment of the first 
custom-house. 

The great superiority of your tariff in regard to the careful dis- 
crimination required for rendering thoroughly efficient the protec- 
tion proposed to be accorded, being thus established, we may now, 
for a moment, turn to the third point of difference to which I have 
invited your attention. There, too, we find protection more com- 
plete, wool being admitted free, while with us it is subjected to 
duties of three and nine cents per pound — and flax and hemp pay- 
ing less than ten dollars per ton, while by the Morrill tariff they 
are subjected to duties ranging from ten to thirty-five dollars per 
ton. 

In all this there is surely nothing of the free trade so strongly 
commended to the world by our British friends. On the contrary, it 
is most efficiently protective throughout its schedules, every part 
of which is varied in precise accordance with the conditions and 
requirements of French industry, and in accordance with the pre- 
vious assurances of Mons. Baroche, when speaking as the organ 
of the Council of State, and of the Emperor himself. It is called 
the Cobden treaty, but it should assuredly, my dear sir, bear your 
name, my deliberate opinion of it being that it is more perfectly 
in accordance with your previous assertion of the duties of a 
government than any treaty that had ever before been negotiated. 
The history of the world presents no record of the existence of 
any customs tariff conforming so exactly to the wants of a com- 
munity, maintaining legitimate protection with such entire and 
absolute efficiency. Would to Heaven that we had statesmen who 
could give us precisely such an one ! Compared with it' the Mor- 
rill tariff is a construction of a kind so rude, that we have al- 
most reason to feel ashamed of having presented it to the world 
as a protective measure. 

Believing, my dear sir, that you must now be quite convinced 
that the great error of the Morrill tariff, when compared with your 
own, is to be found in its mistaken liberality towards foreign na- 
tions, I now propose to ask, for a moment, your attention to a 
brief comparison of some of its provisions with those of that 
general tariff which long has governed, and, as I believe, still 
governs, the intercourse between this country and your own. The 
one says to the people of France — "Bring us all the products of 
your soil, or of those of any other country of the world. Put 
upon them as much labor as you please — change their form in 
whatsoever manner may be most agreeable to you — and we will 
admit them all on the payment of duties rarely exceeding thirty 
per cent. — those duties, too, being charged on the ad valorem 
principle, by means of which you have generally been able to 
reduce them to little more than twenty per cent." 



LETTERS TO MONS. MICHEL CHEVALIER. 



13 



The other says to the people of this country — "Bring us 
wheat and cotton, coal and ores, rags or hemp, pipe clay, wool, 
hides, and all other of the rudest products of your soil and labor, 
and we will accept them at nominal rates of duty ; but be- 
ware of doing anything whatsoever towards changing them in 
form. Labor abounds with us, and it is our first duty to find 
employment for it, and thus make a market on the land for all the 
products of the farm. On no condition whatsoever will we 
admit your cotton, after you shall have converted it into cloth, 
or your hides, after you shall have changed them into leather — 
there being a determination on our part that you shall not follow 
the advice of Adam Smith in converting food and wool, or food 
and hides, with a view to facilitation of their transport to any 
part of France. Should you undertake to send us your food and 
rags in the form of paper, the product shall be admitted only 
on payment of eight or ten cents per pound. Should you send 
food and clay in the form of stone ware, the tax shall be eight 
or ten cents per pound ; and, further, if you send your food, lime- 
stone, coal, and iron ore, in the form of a railroad bar, you shall 
pay from twenty to thirty dollars per ton for the privilege of 
selling it in any of our domestic markets. The first duty of a 
government is to provide employment for its people, and that duty 
we mean shall fully be performed. 

" Further even than this, should you send us tobacco, we pray 
you to recollect that we limit you to a single great purchaser, 
with the express desire to buy it as cheaply as possible, and to 
sell it at the highest prices. The higher we sell it, the larger 
must be our profits, but the smaller must be the demand for the 
raw commodity, and the lower must be the price at which you 
will be required to sell it. In this manner we shall add very 
many millions to our public revenue, no small portion of which 
you will be required to pay, and thus shall we compel you to con- 
tribute to the support of. the fleets and armies required for our 
defence." 

Such, my dear sir, is the language of France to America, and 
it is to such dictation as this that the latter has to this hour 
submitted. That it should so have done is, as you must admit, 
most wonderful. That such submission, altogether at war, as it 
is, with the teachings of Adam Smith, and with those of all the 
eminent men to whom I have referred, yourself included, should 
have resulted in discord among our people, is only what might 
naturally have been expected, and what I have for many years 
predicted. Let us hope for better things, now that we have 
made one slight step, and a very slight one indeed it is, towards 
re-establishing among ourselves a policy more in accordance with 
that established for France by the treaty recently so well concluded. 



14 



LETTERS TO MONS. MICHEL CHEVALIER. 



As regards the objects sought to be attained, there is not even 
a shadow of difference between this latter and its predecessor. 
Both look carefully to the one great end of promoting diversifica- 
tion in the employment of your people, regarding it as necessary 
to the development of that great internal commerce in the absence 
of which there can be none of that continuity in the demand for 
human service which is so essential to growth in wealth, civiliza- 
tion, power, and influence. Widely different, however, are they in 
their modes of operation — the one accomplishing by means of care- 
ful discrimination more than previously had been obtained by aid 
of prohibition. Such, however, are the changes everywhere ob- 
served — the skilful surgeon of our day accomplishing, by little more 
than the turn of his finger, operations that to Ambrose Pare, 
great as he certainly was, but working with the poorest instru- 
ments, were wholly impracticable without severe exertion of mere 
brute force. Your tariff is on a level with the surgery of the 
present day, whereas the one of which you have now complained 
is so defective when compared with it, as scarcely to be above the 
level of that of the days of Pare and the League. 

Believing, my dear sir, that you can scarcely fail to find, in the 
facts that have been submitted for your consideration, conclusive 
evidence that you have been seriously misled in your estimate of 
our recent course of action, and that you will be disposed to agree 
with me in the idea that better to suit our tariff to " the atmo- 
sphere of the nineteenth century," we should follow your example 
in making it more, and not less, protective of the land and labor 
of the country, I remain, with great regard, 

Yours, faithfully, 

HENRY C. CAREY. 

Mons. Michel Chevalier. 
Philadelphia, October 28, 1860. 



LETTERS TO MONS. MICHEL CHEVALIER. 



15 



LETTER THIRD. 

Dear Sir : — 

As has been seen, your tariff is, in most respects, far more in 
accordance than is our own, with the ideas you have so well ex- 
pressed in regard to "the positive duty of governments so to act 
at each epoch of the nation's progress as to favor the taking pos- 
session of all the branches of industry whose acquisition is autho- 
rized by the nature of things" — there being, as I conceive, no case 
on record, in which an economist, become a statesman, has so 
completely reduced to practice the theories he before had taught. 
In one most important respect, however, our tariff is greatly more 
defensible, upon the principles you have so well enunciated, than 
is your own, as I propose now to show you. 

The essential object of protection is that of bringing about 
such combination of action as will make demand for all the va- 
rieties of human power, both physical and mental, and for all the 
rude products of the earth — " agriculture alone," to use your 
own words, " being insufficient," and there arising in every country 
a necessity, in the interests of human progress, for adding thereto 
all the principal branches of industry, from the making of cottons 
and woollens to the working of metals and of mines, and to the 
arts of navigation. " To that point," in your view, " the pro- 
gramme is certainly right;" but "Nature," as you have further 
said — 

" Has herself determined the limits beyond which this diversification 
may not be carried. It would be absurd for England, or for Northern 
Germany, to endeavor to produce at home the wines they drink ; for us 
to try to raise the cotton we spin, weave, and print ; for Italy to pretend 
to draw from herself the ice with which she seeks, in the heat of summer, 
to cool her thirst ; for Western Europe to impose upon itself a necessity 
for drawing from its own poor mines its supplies of the precious metals ; 
or for France to refuse to manufacture any tin, copper, or zinc, but those 
yielded by its own particular mines. When nature, in her caprice, has 
refused to a country so extensive as our own an abundance of ores and 
fuel, it would then be an absurdity for it to insist upon supplying all its 
wants from the few little veins of coal, or meagre deposits of ores, that 
have been scattered over it." 

Such is the completion of your own programme, every part of 
which has, as you may rest assured, the most hearty indorsement 
of every friend of the system of which you have here shown your- 
self the earnest advocate, from the shores of our northern lakes to 



16 



LETTERS TO MONS. MICHEL CHEVALIER. 



the Gulf of Mexico, and from the Atlantic to the Pacific. It would 
be absurd for us of the North to attempt to raise our own cotton, 
our spices, or our oranges. Equally absurd would it be for Cuba 
or Louisiana to attempt to raise rye or wheat, for with every step 
there would be an increase of difficulty in obtaining the supplies 
required. Directly the reverse of this, however, must be the case 
with those whose soils and climates are fitted for the production 
of cotton or of wheat, or with those others who have fuel and ore 
in great abundance — protection being there sought with a view to 
facilitate the conversion of food and cotton into cloth, or fuel and 
ore into iron, thereby creating demand for human power, physical 
and intellectual, and producing that "combination of varied effort" 
so properly regarded by yourself as not only "promotive of pros- 
perity," but as being the one and only "condition of national pro- 
gress." Protection, therefore, may with great propriety be resorted 
to when it is in accordance with "the nature of things," but never 
otherwise. Such, my dear sir, being the test you have yourself 
established, we may now proceed to an examination of the ques- 
tion whether your tariff or our own is most defensible when so 
considered. 

France has food, labor power, and intelligence, three of the raw 
materials required for the production of cotton cloth, but she is 
short of fuel and wholly deficient in the wool — no cotton being 
there produced. Determined, however, to profit of those she has, 
she protects the cotton manufacture, in the treaty that you are 
said to have negotiated, by a series of provisions so elaborate as 
to be a cause of wonder to all of us Americans who have had a 
chance to study them, and by her general tariff actually prohibit- 
ing the producers of cotton in India and America from sending 
their product in any form but that in which it must be sure to 
make a market for all the raw materials she herself can furnish. 
Fully successful as she has been in securing to herself the control 
of her own supplies, she yet maintains protection at its highest 
point, and in its most perfect form, with a view to enable her to 
supply the world with her own food and her own labor in the 
shape of cloths and silks — doing this to such extent that she now 
stands foremost in the list of nations as the largest exporter of 
domestic food, domestic labor, and high intelligence. That she is 
right in this, no one can doubt. That others are wrong- in not 
following her great example is a fact about which there can be as 
little question. 

Looking next to the country that has given to the world the 
much-abused Morrill tariff, we find food in such abundance that* a 
bushel of corn may now be bought in Iowa for less money than is 
required to*pay for a single yard of the coarsest cotton cloth — in 
which labor power is so abundant that more than half of it is 
wasted in the absence of demand for its employment — -in which 



LETTERS TO MONS. MICHEL CHEVALIER. 



intelligence so much abounds that most of the great improve- 
ments of recent times have there originated — in which fuel abounds 
to an extent unknown elsewhere — and, finally, in which cotton 
grows so freely that it might with ease be made to supply the 
entire demand of the world — all the raw materials of cotton cloth 
thus existing there to an extent to which the world affords no 
parallel whatsoever. 

Such being the condition of these two countries in regard to 
cotton and its products, which of the two, my dear sir, is acting 
most in accordance with your own principles in granting the pro- 
tection required for taking possession of the cotton manufacture? 
Is it France that is so much deficient in fuel, and so wholly defi- 
cient in cotton ? Or, is it this country, that has both, and that 
has, in addition, all tha,t France possesses ? As it seems to me, 
you can scarcely fail to admit that it is the latter, and that you 
have been much in error in denouncing as erroneous the feeble 
attempt that has been made in the Morrill tariff to follow in your 
footsteps. Should you desire any evidence of this, let me beg you 
to turn to Adam Smith and re-peruse his admirable exhibit of the 
advantages resulting from combining tons of food and hundred 
weights of wool in the form of cloth — thereby enabling both to 
travel freely and cheaply to the remotest corners of the world. 

As regards iron, the case is, as I think, equally strong — France 
being largely deficient in both fuel and ore, while this country 
abounds in both to an extent unequalled in any portion of the 
earth. By your own tariff, nevertheless, pig iron is loaded with a 
protective duty seven-tenths as great as that complained of in the 
Morrill tariff. Make it even ten times greater, and France could 
not then supply herself ; whereas, under even the present moderate 
duty, this country could, in a brief period, supply all the demands 
of the thousand millions of the human race. 

Passing upwards from the pig to the bar, and thence to the 
various commodities made from iron, the case becomes yet stronger, 
labor and fuel being the only raw materials then required to be 
used. Of the last, France has but little, and yet, because she has 
the first, you impose duties far higher than our own. Should not 
the course of operation, my dear sir, be directly the reverse of this, 
our government imposing high duties with a view to the develop- 
ment of our vast internal wealth, and France opening her ports 
for the reception of American labor, food, coal, and ore, whenever 
they took the form of iron ? That to do so would, with both our 
nations, be quite in accordance with your own most excellent pro- 
gramme, you must, I think, admit. If so, have you not been much 
in error in denouncing the Morrill tariff as " a child of discord" — 
as a monster that "will not live" — as a thing that must be stifled in 
the free "atmosphere of the nineteenth century," and that "must 
perish in the midst of the confusion of its authors" — and which 
2 



18 



LETTERS TO MONS. MICHEL CHEVALIER. 



is yet in an almost infinite degree less protective of the material 
interests of the country than is your own ? The more you shall 
study the subject, the more will you, I think, be disposed to arrive 
at the conclusion, that our real error is to be found in the fact that 
we have, in past times, so much failed to follow in the footsteps 
of your countrymen, and that, even now, when we have professed 
to re-adopt your system, we have failed to take as a model the 
admirably protective treaty for which your country is understood 
to have been so much indebted to yourself. 

Why, however, if all the raw materials are so cheap and abund- 
ant, should protection be here required ? For the same reason 
that it has always been, and is now, after so very many years of 
thorough protection, still needed in France, as a means of defence 
against the barbarizing warfare described in the following extract 
from a report made to the British House of Commons, and printed 
by its order, but a few years since : — 

" The laboring classes generally, in the manufacturing districts of this 
country, and especially in the iron and coal districts, are very little 
aware of the extent to which they are often indebted for their being em- 
ployed at all to the immense losses which their employers voluntarily 
incur in bad times, in order to destroy foreign competition, and to gain and 
keep possession of foreign markets. Authentic instances are well known 
of employers having in such times carried on their works at a loss 
amounting in the aggregate to three or four hundred thousand pounds 
in the course of three or four years. If the efforts of those who encour- 
age the combinations to restrict the amount of labor and to produce 
strikes were to be successful for any length of time, the great accumu- 
lations of capital could no longer be made which enable a few of the most 
wealthy capitalists to overwhelm all foreign competition in times of great de- 
pression, and thus to clear the way for the whole trade to step in when 
prices revive, and to carry on a great business before foreign capital can 
again accumulate to such an extent as to be able to establish a competi- 
tion in prices with any chance of success. The large capitals of this 
country are the great instruments of warfare against the competing capital of 
foreign countries, and are the most essential instruments now remaining 
by which our manufacturing supremacy can be maintained ; the other 
elements — cheap labor, abundance of raw materials, means of communi- 
cation, and skilled labor — being rapidly in process of being equalized." 

England seeks to have raw materials at low prices, while aim- 
ing to have high prices for cloth and iron. That she may have 
both, she makes the terrible war above described, and thus pre- 
vents advance in civilization in all the countries subjected to her 
control. France protects herself against it, and has done so 
steadily, and your recent most excellent treaty furnishes proof con- 
clusive that she means to do the same in all the future, knowing 
well that diversification of pursuits is "the condition of national 
progress" in strength, wealth, and civilization. The result is 
seen in the wonderful growth of her commerce, and in her most 
extraordinary advance in prosperity, power, and influence. This 
country, on the contrary, has, for the last fifteen years, permitted 



LETTERS TO MONS. MICHEL CHEVALIER. 



19 



the subjugation of its farmers and planters to a system under 
which they have been becoming daily more dependent upon British 
traders, and with precisely the same result that has been realized 
in every other country of the world that has been either unwilling 
or unable to protect itself against this worst of tyrannies — destruc- 
tion of internal commerce — increasing weakness — and growing 
discord among the States, ending in civil war. 

You, however, are disposed to look upon the Morrill tariff, 
poor a copy as it is of your own most admirable one, as "a child 
of discord." Further reflection will, as I think, satisfy you, that 
the war now raging is but the legitimate child of that British 
free trade system which is so well described in the passage above 
presented for consideration. In proof that it is so, I venture 
to trespass a little further upon your time, to ask your attention 
to the following facts, without a knowledge of which it is scarcely 
possible to arrive at a correct conception of the causes of the un- 
fortunate contest now pending between that portion of our people 
which does, and that which does not, believe in human slavery as 
an institution given of God, and to be perpetuated throughout 
the future. 

The great backbone of the Union is found in the ridge of moun- 
tains which commences in Alabama, but little distant from the 
Gulf of Mexico, and extends northward, wholly separating the 
people who inhabit the low lands of the Atlantic slope from those 
who occupy such lands in the Mississippi valley, and itself con- 
stituting a great free soil wedge, with its attendant free atmo- 
sphere, created by nature herself in the very heart of slavery, and 
requiring but a slight increase of size and strength to enable those 
who now direct it to control the southern policy, and thus to 
bring the entire South into perfect harmony with the North and 
West, and with the world at large. That ydu may fully satisfy 
yourself on this head, I will now ask you to take the map and 
pass your eye down the Alleghany ridge, flanked as it is by the 
Cumberland range on the west, and by that of the Blue Moun- 
tains on the east, giving, in the very heart of the South itself, a 
country larger than all Great Britain, in which the finest of cli- 
mates is found, in connection with the land abounding in coal, 
salt, limestone, iron ore, gold, and almost every other material 
required for the development of a varied industry, and for secur- 
ing the attainment of the highest degree of agricultural wealth ; 
and then to reflect that it is a region which must necessarily be 
occupied by men who, with their own hands till their own lands, 
and one in which slavery can never by any possibility have more 
than a slight and transitory existence. That done, I will ask of 
you here to reflect what would be now the condition of this country 
had its policy for the last fifteen years been such as would have 
tended towards filling this great free soil wedge with free white 



20 



LETTERS TO MONS. MICHEL CHEVALIER. 



northern men — miners, smelters, founders, machinists — workmen 
of all descriptions — who should have been making a market for 
every product of the farm, with constant increase in the value of 
land and labor, and as constantly growing tendency towards in- 
crease of freedom for all men, whether black or white ? Would 
not, under such circumstances, power have made its way to the 
hills, and would not iron, coal, limestone, and copper have been 
enabled to dictate law to the cotton kings — to the men who live 
on the river bottoms, and live in ease at the cost of those of their 
fellow-men whom they buy and sell in the open market ? Could 
we, by any possibility, have witnessed the present extraordinary 
state of things, had the policy of the country in reference to do- 
mestic and foreign commerce, in any manner resembled that admi- 
rable one which finds its best exemplification in that treaty of 
which you speak, and of which you are, to so great an extent, the 
author? Most assuredly we should not. To the British free 
trade system, against which you, my dear sir, have sought so care- 
fully to guard your fellow-citizens, we owe our present discord; 
and that we do so owe it, you will, I feel assured, be prepared to 
admit, when you shall have carefully studied the facts that have 
been laid before you. 

That it is in efficient protection we are to find the road towards 
freedom of trade, freedom of man, wealth, strength, power, peace, 
and civilization, is the lesson taught in those passages of your 
own work to which I have referred ; and that it has proved to be 
the certain road, is the one that is taught in a portion of your 
recent address, to which, in another letter, I propose to invite 
your attention, remaining, meanwhile, with great regard and 
respect, Yours, very truly, 

HENRY C. CAREY. 

Mons. Michel Chevalier. 
Philadelphia, October 30, 1861. 



LETTERS TO MONS. MICHEL CHEVALIER. 



21 



LETTER FOURTH. 

Dear Sir : — 

The following is the passage of your Address referred to in 
my last, as furnishing proof conclusive that the policy of protec- 
tion initiated by Colbert, steadily pursued by France, recently so 
ably advocated by yourself, and now so firmly established by the 
treaty you have made, is the true and only road towards domestic 
and foreign peace, towards the full development of human powers, 
and towards an ultimate entire freedom of international inter- 
course : — 

" The treaty of commerce between the United Kingdom and France 
has already given occasion to a treaty of commerce* between Belgium and 
France. In a few weeks probably it will have determined the signature 
of a treaty of commerce between France and the Zollverein, or at least 
between France and Prussia ; for that treaty has already been for several 
months under negotiation. In a short time, I think I can assure you of 
it, we shall see concluded a treaty between France and that young king- 
dom, called to so glorious a future, which the noble and intelligent sword 
of the Emperor Napoleon the Third and the patriotic perseverance of Ca- 
vour have raised from the tomb in Italy. Each one of the States which 
has thus signed a treaty of commerce with France in consequence of the 
English treaty, or which will sign one, becomes a focus of propagation 
for free trade ; and in treating itself with other States it determines them 
to propagate it around themselves. It is thus that the number of labor- 
ers in the vineyard of the Lord is continually increasing." 

Your countrymen, my dear sir, have a saying from which we 
learn, that "whoso shall make of himself a sheep, will be sure to 
find wolves ready to devour him," and all experience proves that 
such is certainly the case with regard not only to men, but also 
to communities of men. In the world of international commerce, 
England has always played the part of wolf, while seeking to 
induce the other nations to take that of sheep — permitting her 
to make of her little island the one and only " workshop of the 
world," to which all other communities were to be compelled to 
send their products in their rudest forms, to be there changed in 
form, and there taxed. Foremost and firmest in resistance to 
this oppressive system has been France. Other nations that 
hitherto have been disposed to play the part of sheep, have re- 
cently followed her good example, and with such effect that they 
appear now to be grouping themselves together for the purpose 

2* 



22 



LETTERS TO MONS. MICHEL CHEVALIER. 



of making that resistance more effectual; but that any such action 
on their part can be construed into an admission of the truth of 
the British free trade doctrine, neither you nor I can readily be- 
lieve. The ends they have sought to attain have been — first, a 
development of the power of association and combination among 
their own people ; second, a development of agriculture consequent 
upon the creation of a domestic market for the products of the 
farm ; and third, an assertion of their right to determine for 
themselves the form in which their products should be exported ; 
and it has been for the purpose of carrying those views into 
full effect that they have had recourse to protective measures. 
British free trade, on the contrary, desires to prevent the growth 
of association everywhere, while dictating to all the world the 
forms in which their exports shall be made; and in the pursuit of 
that policy England has exhibited a steadiness and determination 
that is wholly without a parallel in history. That she has re- 
cently abandoned certain portions of her programme is very certain ; 
but as I propose, my dear sir, to show you, not a single step in 
that direction has ever yet been taken that has not been forced 
upon her by the protective measures of other nations. 

Prohibiting her colonists from bringing to her markets, except 
in their rudest form, any of their products, she thereby prohibited 
them from combination among themselves, while subjecting them 
to a taxation for transportation, for changes of form, for ex- 
changes, and for the support of government, so oppressive as to 
take from the poor producer, as then estimated by British mer- 
chants, more than two-thirds of the total product of his land and 
labor. Prohibiting them from converting their rude products 
into commodities required for even their own especial use, she 
thus increased the quantity requiring to be transported to her 
markets, to be there converted, exchanged, and taxed. Prohibiting 
them from the use of any ships except her own, she thus com- 
pelled them to pay to her, and to her alone, the enormous amount 
required for the transport of so much bulky freight. Prohibiting 
the export of machinery, and the emigration of artisans, she 
thus denied to them, and to the world at large, the power to 
profit of the great discoveries in regard to steam, and to other 
of the great natural forces, that had then been made. Prohibiting, 
to the utmost extent of her ability, combination everywhere, she 
compelled Germany to send her wool — Russia to send her hemp and 
flax — India and Carolina to send rice and cotton — Jamaica and 
Brazil to send their sugar in its rudest state — each and every of 
these commodities being subjected to the payment of heavy duties 
on their entry into her ports, preparatory to their re-exportation 
in a finished form to the countries in which they had been pro- 
duced. Occasionally, and only occasionally, her tributaries were 
permitted to feed some slight portion of the artisans she thus 



LETTERS TO MONS. MICHEL CHEVALIER. 



23 



employed. Taxes on the food they sent were added to those 
on raw materials of manufacture, and the enormous amount thus 
raised was then appropriated to the maintenance of fleets and 
armies employed in coercing the producers of food and raw mate- 
rials into submission to a system more tyrannical, more destructive 
of morals, more antagonistic to civilization, and more in opposi- 
tion to all the teachings of Adam Smith, than any other that had 
existed from the creation of the world. 

With time, however, there came resistance — this country setting 
the example of a determination to compel the recognition of 
equality on the ocean; a movement that was followed by repeal 
of the obnoxious provisions of the Navigation Laws. Following 
in the same direction, we find our protective tariff of 1828 com- 
pelling the disappearance of the tax on cotton — that of Russia, 
of 1825, doing the same by the taxes on flax and hemp — that of 
Germany, doing it in regard to wool — and our own highly pro- 
tective tariff of 1812 giving the coup de grace to the restriction 
on the import of food. Thenceforth, all foreign nations were to 
be permitted to bring the raw products of their various soils, and 
to have them so changed in form as to fit them for consumption, 
without the payment of any direct tax for the support of the 
British government — the indirect taxation to which they were sub- 
jected, enormous as it was, being held to be entirely sufficient. 

Such is the history of the rise and progress of British free trade 
— every step in that direction having been forced upon the people 
of England by the adoption of measures of resistance, in the form 
of tariffs adopted with the view of carrying into effect your own 
grand idea of acclimating among the nations of the earth each 
and all the various branches of manufacture, and thus familiariz- 
ing them "with the working of metals and of mines, with the 
various departments of mechanics, and with the art of navigation." 
For the accomplishment of that great object, the governments of 
those several countries had not been forced to resort to any "abuse 
of power." On the contrary, they had, my dear sir, to use your 
own words, only "performed a positive duty in seeking to take 
possession of all the various branches of industry whose acquisi- 
tion was authorized by the nature of things," and they were being 
in part rewarded by the emancipation of their people from a taxa- 
tion of the most oppressive kind. Having protected their people, 
they had ceased to "make of themselves sheep," and the danger 
of becoming a prey to wolves had almost disappeared. 

That protection is the one and only road towards freedom of 
international intercourse, is proved by all the occurrences of the last 
thirty years. Were further proof of this here required, it would 
be found in the fact that the idea of reciprocity is found in none 
of the arrangements of England with those states which are either 



24 



LETTERS TO MONS. MICHEL CHEVALIER. 



unable or unwilling to protect themselves — those which furnish 
sugar and tea, coffee and tobacco. 

Of the amount paid by the people of England for sugar, no less 
than £5,000,000 is taken by the public treasury. Were there no 
such claim, the quantity of money expended on sugar would not 
be in any manner diminished — the consumption growing with a 
reduction of price that would enable both producer and consumer 
to profit of the change. The effect of this would soon exhibit 
itself in a rise in the price of the whole crop, giving to the whole 
body of producers probably six, eight, or even ten millions of 
pounds per annum more than they now obtain. Such being the 
case, does England, in her anxiety for reciprocity, propose to accept 
sugar from its producers at the same low rate of duties at which 
she desires them to receive her cloth and iron ? Not at all ! On 
the contrary, one of the essential objects of that war which is so 
well described in the public document given in my last, is that of 
compelling the people of the tropics to devote their exclusive 
attention to the sugar culture — to increase the quantity thrown 
upon her market — to diminish the price and increase the consump- 
tion — and thus to enable her to take a constantly increasing pro- 
portion of the product for the maintenance of her government. 
Anxious to sell cloths, she makes a war upon China which 
closes with a treaty providing for the admission of cottons and 
woollens at very low duties, but without the slightest suggestion 
of remission of any part of that enormous proportion of the price 
paid by the British public for tea (£5,000,000) which is now re- 
quired for public purposes. So, too, with tobacco, which pays 
another £5,000,000, nearly every shilling of which comes from 
the pockets of men who are surrounded by great deposits of coal 
and iron ore which they cannot work, because of the " determina- 
tion of British iron -masters to destroy competition, and to gain 
and keep foreign markets;" and who are, therefore, compelled to 
devote their labor to the raising of rude products for the British 
market. Professedly anxious for freedom of trade, she so dis- 
criminates — or quite recently has so discriminated — against refined 
sugar from her colonies, as to compel her own subjects to send 
their products to her ports in their rudest state. Anxious, too, 
for reciprocity, when it suits her purpose, she urges with all her 
force a treaty between this country and Canada, and yet refuses 
to permit the formation of a treaty of reciprocity between her 
colonists of the West Indies and those of her possessions on this 
continent. Such, my dear sir, is the character of British free 
trade practice — each and every step toward any real freedom 
having been forced upon the government by the adoption by other 
nations of policies closely resembling that which France has so 
long pursued, and to which you have affixed your seal in the 
treaty so lately made. Such being its character, and there being 



LETTERS TO MONS. MICHEL CHEVALIER. 



25 



now — as always heretofore — a manifest determination to "over- 
whelm all foreign competition," and to accomplish this by means 
of a warfare of the most destructive kind, can we regard Great 
Britain, with all her free trade professions, as any other than the 
wolf she always has been, although now appearing in the clothing 
of the sheep ? As it appears to me, it is quite impossible that 
we should do so. 

By Englishmen generally this suggestion may be regarded as 
most unjust, and for the reason, that they have so long been ac- 
customed to judge of every measure by its probable effect upon 
their own trade, their own profits, their own manufactures, and 
their own power, as to have become almost entirely incapable of 
occupying any other stand point whatsoever. As a consequence 
of this it is, that, to use the words of your most distinguished 
countryman, I)e Toequeville : — 

"In the eyes of the English, that which is most useful to England is 
always the cause of justice. The man or the government which serves 
the cause of England has all sorts of good qualities ; he who hurts those 
interests, all sorts of defects, so that it would seem that the criterion of 
what is noble, or just, is to be found in the degree of favor or opposition 
to English interests. The same thing occurs to some extent in the judg- 
ments of all nations, but it is manifested in England to a degree that 
astonishes a foreigner. England is often accused on this account of a 
political machiavellism which, in my opinion, not only does not exist 
any more, but rather less than elsewhere." 

The real charge to be brought against her is not machia- 
vellism, but selfishness such as is above so well described, and 
which wholly unfits her for taking the lead in the work of organi- 
zation in which your own country, my dear sir, seems now to be 
so well engaged. Of all the countries of the world, England is 
the one that has the fewest real friends, and hence it is that she 
has so entirely lost her hold on Europe. How she stood, a year 
since, on this continent, even among those who are now soliciting 
her aid for the destruction of this Union, may be seen from the 
following extract from a speech of Mr. Jefferson Davis, now at 
the head of the, so-called, Confederate States, delivered in the 
Senate of the United States, less than eighteen months since : — 

" This English teaching, this English philanthropy, is to us what the 
wooden horse was at the siege of Troy. It has its concealed evil. It looks, 
I believe, to the separation of these States ; the ruin of the navigating 
and manufacturing States, who are their rivals ; not the Southern States, 
whp contribute to their wealth and prosperity. Yet, strange as it may 
seem, there only do the seeds they scatter take root. British inter- 
ference finds no footing, receives no welcome among us of the South. 
We turn with loathing and disgust from their mock philanthropy." 

Towards France, as I believe, there exists no such feeling as 
that which is here exhibited, in any portion of the world; and for 
the reason, that her position in the world of commerce has always 



26 



LETTERS TO MONS. MICHEL CHEVALIER. 



been that of the sheep which has desired to protect herself, and 
not that of the wolf desiring to prey upon the sheep. The results 
of this now exhibit themselves in the facts, that by means of a 
protective system more stringent and more steadily maintained 
than any other in the world, she has been enabled to obtain 
the admission into the British markets of many of the most im- 
portant products of her vast and varied industry, while retaining 
for herself that thorough protection for her own manufactures 
which had before been promised by the Council of State ; and, 
that she is becoming from day to day more fully enabled, by means 
of the reciprocity system, to bring to act in concert with her, those 
of the countries of continental Europe whose policy has recently 
been most in accordance with her own — thereby bringing the sheep 
to act together, and thus enabling them more thoroughly to repel 
the wolf's attacks. The idea is a grand one — it being the organi- 
zation of Europe at large in opposition to that system which looks 
to having but a single workshop for the world. Fully carried out, 
it cannot fail to result in placing France in the 4ead of both the 
political and the commercial world. 

French commercial policy tends thus to the production of union 
between France and the advancing communities of the earth, and 
brings with it, as you so properly say in your Address, "the thought 
of mutual approximation and of harmony among the most civil- 
ized nations" — that is, of those nations which have most adopted 
your own admirable ideas as to the duty imposed on governments 
so to act as to secure the taking possession of all the various 
branches of industry for which they are fitted, and thus to pro- 
mote that diversification in the pursuits of their people which is 
required for the production of harmony within, an<J strength for 
resistance to all attacks from without. British policy, on the con- 
trary, tends to the prevention of any movement in that direction, 
and hence it is, that in all the nations subject to it, we witness 
nothing but growing discord at home, with steady decline in the 
power for self-defence, the latest proof of this being furnished in 
the recent history of these United States ; the Germanic Union, 
on the contrary, furnishing the most conclusive evidence of the 
advantages to be derived from moving in the direction indicated 
by France. 

Thirty years since, Northern Germany presented to view a con- 
geries of independent states, various in their sizes and widely dif- 
ferent in their modes of thought and action. Small as they were, 
each had its little custom-houses, and, as a necessary consequence, 
there was but little domestic commerce, and absolutely no common 
bond of union. Prohibited by England from obtaining machinery, 
their people found themselves compelled to send their food and their 
wool to that country in search of the spindle and the loom, and 
there to submit to severe taxation as a condition precedent to the 



LETTERS TO MONS. MICHEL CHEVALIER. 



27 



conversion of the two into cloth, to be then returned to the place 
from whence the materials had come, and to be worn by those to 
whose labors their production had been due. Food and wool were, 
of course, very cheap, while cloth was very dear, and the farmer 
very badly clothed. A better day, however, was then close at 
hand — stern necessity having compelled the formation of new 
arrangements which gradually took the form of a great Customs 
Union — embracing 35,000,000 of people — within which commerce 
was to be absolutely free. Without its limits trade was to be 
subjected to such restrictions as were deemed to be required for 
carrying into effect the grand idea of " acclimating" among the 
German people "the principal branches of industry," and "adding 
to woollens and cottons all that might be required for rendering 
them familiar with the working of metals and mines, and with the 
arts of navigation" — in full accordance with the ideas that you, 
my dear sir, have so well expressed. Under the system thus 
inaugurated, the people gradually grew in strength and power — 
each and every stage of their growth being attended by a disap- 
pearance of some of the restrictions under which they before had 
suffered. First, came permission to purchase machinery in Eng- 
land. Next, the English duties on wool disappeared. Again, 
the market of England was opened to their food. With each suc- 
cessive stage of progress towards commercial freedom, there came 
a diminution in the necessity for exporting raw materials, and an 
increase in the power to export finished commodities, with steady 
increase in the prices of food and wool as compared with those of 
cloth and iron, and a constant increase in the productiveness and 
value of German labor and land. With each, there came an in- 
creased desire for the formation of a closer and more intimate 
union than that which then existed. With each, the government 
grew in strength for resistance to aggression from abroad — that 
strength having, within the last three years, manifested itself to an 
extent that could scarcely have been anticipated, even by those 
who had most carefully studied the Germanic movement. Here, 
as everywhere, my dear sir, enlightened protection has proved to 
be the road towards strength and independence. 

Thirty years since, the American Union exhibited a scene of 
prosperity, the like of which had never been known — a thoroughly 
protective tariff having largely aided in developing the industry of 
the country, while so rapidly filling the public treasury as, three 
years later, to compel the entire extinction of the public debt. 
Always turbulent, South Carolina was then as anxious for a dis- 
solution of the Union as she has recently proved herself to be, 
but so strong was then the attachment to the Union that she 
could find no second. Three years later, the British free trade 
system was re-inaugurated ; and since then, with the exception 
only of the years from 1842 to 184Y, our course has been dictated 



28 LETTERS TO MONS. MICHEL CHEVALIER. 

to us by the class of men which thrives upon the profits of trans- 
portation, and desires, therefore, that all our products shall be 
exported in the most bulky form. Fifteen years have now elapsed 
since we last abandoned that policy to the steady pursuit of which 
France owes her present strength. With each and every of those 
years, the relations of American slavery and British free trade 
have been becoming more close and intimate. With each, there 
has been an increasing alienation of the several portions of the 
Union, and for the simple reason, that with each there has been 
a diminution of the power to maintain domestic commerce, 
accompanied by an increase in the necessity for looking to Eng- 
land as the only outlet for those rude products of our soil which 
we have not been allowed to manufacture. Having thus made 
of ourselves sheep, the wolf stands now ready to devour us so 
soon as a fitting opportunity for so doing shall be presented. 
Anxious to pass from that position, and to take once more our 
true one, we have now established the Morrill tariff, and although, 
as a protective measure, it is but a very feeble imitation of your 
own, as well as of those to which your German and Belgian neigh- 
bors owe their present wealth and strength, it cannot fail, as I 
think, ultimately to bring about a state of things that shall fit us 
for association, on a footing of reciprocity, with all those civilized 
countries where the plough, the loom, and the anvil are made to 
work together. 

The raising of raw material for distant markets is the proper 
work of slaves and savages, and yet it is to that work to which 
British policy would restrict the nations of the world. Hence 
it is, that slavery and British free trade have, in this country, 
always worked together, and hence, too, it is, that there is, at 
this moment, so strong a pro-southern tendency in the general 
British mind. The more the tendency towards converting those 
raw products into finished commodities — the greater the tendency 
towards the adoption of your own most excellent doctrines — the 
greater becomes the power of both communities and individuals 
to rise from the condition of slaves to that of freemen. French, 
German, and Belgian policies look in that direction, and hence it 
is that there is so general a pro-northern tendency in the mind of 
Continental Europe; That in this respect your feelings are in 
full accord with those of your countrymen generally, I feel very 
certain, and therefore it is, that I cannot but hope that fur- 
ther examination of our recent tariff may lead you to the conclu- 
sion that its authors are entitled to the gratitude of every friend 
of civilization and of freedom. 

That there is a perfect harmony of all real, permanent, and 
well understood international interests, I feel well assured, and 
equally well am I satisfied that the day is not far distant when 
you, and all other of the enlightened men of continental Eu- 



LETTERS TO MONS. MICHEL CHEVALIER. 



29 



rope, must arrive at the conclusion, that the interests of their 
respective countries, as well as those of freedom, would, in the 
past, have been much promoted by our permanent adoption of the 
policy of which France has so long been the chief exponent, and 
by our absolute and determined rejection of that barbarizing 
system which England seeks to force upon a reluctant world — 
and that in the establishment of our present tariff, we have made 
a move in the right direction. 

Begging you to excuse my several trespasses upon your kind 
attention, and hoping that you may live to see the time when the 
whole of continental Europe shall be united in the formation of 
such a protective union as appears to be indicated by your Address, 
I remain, my dear sir, with great esteem and regard, 
Yours, very truly, 

HENRY C. CAREY. 

Mons. Michel Chevalier. 
Philadelphia, October 31, 1861. 



THE WAY TO OUTDO ENGLAND WITHOUT FIGHTING HEE, 

LETTERS 



TO THE 



Hon. SCHUYLER COLFAX, 

Speaker of the House of Representatives, 



ON THE PAPER, THE IRON, THE FARMER'S. THE RAILROAD, 
AND THE CURRENCY QUESTIONS. 



HENEY C. CAKEY, 

AUTHOR OF " PRINCIPLES OF SOCIAL SCIENCE," ETC. ETC. 



PHILADELPHIA: 

HENEY CAEEY BAIRD, 

INDUSTRIAL PUBLISHER, 
406 Walnut Street. 

1865. 



COLLINS, PRINTER, 705 JAYNR ST. 



* 



CONTENTS. 



The Paper Question : 

PAOK 

Letter First 3 

Letter Second . . . 13 

Letter Third . 22 

Letter Fourth .30 

The Iron Question: 

Letter Fifth .......... 42 

Letter Sixth 52 

Letter Seventh 60 

Letter Eighth 69 

The Farmer's Question : 

Letter Ninth . . . . • 86 

Letter Tenth 96 

The Railroad Question : 

Letter Eleventh 110 

The Currency Question : 

Letter Twelfth 126 

Letter Thirteenth . . 133 

Letter Fourteenth 142 

Letter Fifteenth . 151 

Letter Sixteenth 159 



THE PAPER QUESTION 



LETTER FIRST. 

Dear Sir : — 

The gentlemen connected with the press, publishers of books 
and newspapers, have been for two years past, and are yet, engaged 
in the performance of an act that, as it seems to me, closely resem- 
bles suicide; and it is because of my desire to open their eyes to the 
fact that it really is suicidal in its tendencies, that I venture to 
trouble you with the perusal of this letter. Throughout by far the 
larger portion of my life I was one among them, and although 
many years have elapsed since I ceased to be connected with the 
business of publication, the feeling of interest in those concerned in 
it has remained wholly unimpaired. It is, therefore, as an old 
friend, late a co-laborer with themselves — a fellow-citizen having no 
interest in the question except in common with all who are around 
him — that to you, and through you to them, I propose to speak, 
hoping that they may be disposed to reflect carefully on the views 
that will be presented, and confidently believing that they may be 
satisfied that their recent course of proceeding, however injurious it 
may be to the makers of paper, tends to the production of results 
utterly destructive to themselves. 

Most naturally they are anxious that paper shall be cheap, and 
that their business may be large and profitable. So am I, well 
knowing, as I do, that it is to the universal development of intellect 
among our people that we now stand indebted for the fact that this 
Union has been maintained ; and, that if we are to prosper in the 
future it is in the direction of a further and more complete develop- 
ment of the national mind that prosperity must be sought. To 
that end, books and newspapers must be placed within the reach of 
all, old and young, poor and rich, black and white. 



4 



Thus fully agreeing with them in the result at which we should 
desire to arrive, I propose now to ask both you and them to look 
with me to the measures by which it may be attained. To that end, 
allow me now to ask the question — What are the circumstances 
under which commodities of all kinds tend to become cheaper ? Is 
it not when and where there is competition for their sale? What, 
on the contrary, are those in which they tend to become dearer ? 
Is it not when and where there is competition for their purchase? 
To these questions there can be but one reply, and that in the 
affirmative. 

What, now, I would ask, has been the tendency of the action of 
our publishing friends throughout the last two years ? Has it tended 
to promote the building of mills and the increase of competition for 
the sale of paper ? As it seems to me, it has not. On the con- 
trary, as I propose to show, it has been in a direction exactly the 
reverse of this. If so, are not, then, they themselves the authors 
of the grievances of which they now so much complain ? That 
they are, I firmly believe, and equally firm is my belief that they 
may be satisfied that such has been the case. Should they be so, 
then may we once again -see harmony established between two 
great interests, each of which is so directly interested in the pros- 
perity of the other that it is, as I am very certain, entirely impos- 
sible to injure either one without at the same time inflicting serious 
injury on the other. Break down the cotton-spinners, and the 
weavers will soon cease to prosper. Break down the paper-makers, 
and the printers will soon see their hands deprived of employment, 
and their offices closed. 

By the free-trade tariff of 1846, that tariff to which we are mainly 
indebted for all our present troubles, the duty on paper was fixed at 
30 per cent. By the ultra free-trade tariff of 1857 it was reduced 
to 24 per cent. ; but as the duties on all the raw materials of the 
manufacture — soda ash, bleaching powders, rosin, felting, wire- 
cloths, &c. &c. — were correspondingly reduced, the change was 
really unimportant. 

By the Act of 1861 paper was restored to the place assigned to 
it by the free-traders of 1846, being subjected to a duty of 30 per 
cent. The duties on raw materials were, however, largely increased, 
and in some cases more than trebled. Alum was carried up from 
15 to 50 cents per 100 pounds, while bleaching powders were raised 
from 4 cents to 30, and soda ash from 4 to 50. Such having been 



5 



the case, it may be regarded as certain that this most important 
manufacture had not been allowed to profit in even the slightest 
degree of the adoption by the Chicago Convention of Protection to 
Domestic Industry as a part of the platform of principles upon 
which the party was to stand for all the future. Of all the various 
industries of the country, it was, as I believe, the only one that was 
thus excluded, and yet, in all my intercourse since that date with 
gentlemen interested therein, I have never heard the exclusion made 
the subject of complaint. It was wrong, nevertheless. 

At the date of the passage of that act the country had for several 
months been so greatly agitated by the secession movement that 
trade of all kinds was nearly at a stand. Competition for the pur- 
chase of paper had no existence ; but the competition for its sale 
had so greatly grown that the market price was below its actual 
cost, while every foreign product used in the manufacture came to 
the manufacturer burthened with the increase of duty to which I 
have referred. This state of things continued throughout the whole 
of the year 1861, and the change was afterwards but very slight 
until towards the close of the summer of 1862. As a consequence 
of this long-continued pressure upon their resources many paper- 
makers became bankrupt, while throughout the country mills were 
everywhere idle and unproductive. 

Such was the state of things when, on the first of July, 1862, 
Congress passed a law imposing a tax of 3 per cent, upon all the 
paper made in the country, and a further tax of 3 per cent, upon 
the incomes of all concerned in the making of it. A fortnight 
later, with a view to retaining for the domestic manufacturer the 
place, in reference to the foreign one, he previously had occupied, 
the duties on imports were increased, and paper was raised from 30 
to 35 per cent. Thus far, therefore, the paper-maker continued 
to be excluded from all share in the advantages derived by other 
branches of manufacture from the great change of public opinion 
that had been manifested by the most enthusiastic adoption of the 
protectionist plank of the Chicago Platform. 

Shortly after this the commerce of the country began most rapidly 
to revive, and with that revival came a great increase in the demand 
for paper. Then, and not until then, the paper consuming world 
began to appreciate the effect on the supply of rags resulting from 
the closing of Southern ports against the export of cotton. Cotton 
goods were scarce and dear, and all were endeavoring to avoid their 



6 



purchase. The old shirt continued to.be used when, under other 
circumstances, it would have gone to the paper-mill. Cotton waste 
was no longer to be obtained. Linens, too, had greatly risen. The 
domestic supply of raw material was wholly insufficient for meeting 
the now rapidly increasing demand, and prices rose with a rapidity 
proportionate to the alarm excited among the paper-makers in refer- 
ence to the power to keep their mills at work, and among the con- 
sumers in reference to obtaining at any price a full supply of paper. 
Abroad, and for the same reason, prices had advanced, and to the 
augmentation thus produced was here to be added the premium on 
the gold with which to pay for the rags that might be thence ob- 
tained. To all this was further to be added the premium on the 
gold required to pay for the alum, the bleaching powder, the felt- 
ing, the wire-cloth, and other commodities needed in the manufac- 
ture. Coal, of which there is required, as I am assured, pound for 
pound of paper, and even more, had much increased in price, while 
labor also had much advanced. 

As a consequence of all these things the price of paper went 
rapidly up, and to those manufacturers who had succeeded in stem- 
ming the tide in the past two years there opened up a prospect 
of obtaining profits that might perhaps indemnify them for the 
losses that had been sustained. This was precisely the state of 
things that should have been desired by the paper consumers, being 
that which was needed for reopening mills that had been closed, for 
promoting the building of new ones, for utilizing new materials, 
and for thus stimulating all to increased competition for the sale 
of paper. Instead of looking at it in this light, they at once raised 
a cry of monopoly which was persevered in throughout the whole of 
the ensuing session of Congress, until, just at its close, the duty on 
paper was, most unfortunately for those who asked it, reduced to 
20 per cent. More unfortunate by far would they have been had 
they fully succeeded, as they had asked an entire repeal of the duty, 
the effect of which must have been that of closing nearly every 
printing paper-mill in the country, and placing them entirely at the 
mercy of European manufacturers. Had they then succeeded, they 
would this day be as clamorous for the re-establishment of protec- 
tion as they now are for an extension of the free trade system. 

The duty on printing paper had now been reduced to one-sixth less 
than that at which it had been fixed by the ultra free trade tariff of 
1857. In the mean time raw materials of every kind had been 



heavily taxed — paper itself had been taxed three per cent. — and the 
incomes of the unfortunate people who had thus been placed under 
the ban had been subjected to a tax of the same amount. Making 
allowance for all these things the real duty, to which they could at 
all look for protection, was not even one-half as great as it had 
been under that ultra free trade tariff to which we had been so 
largely indebted for the crisis of 1857 and for the ruin of so large a 
proportion of the mos.t useful portion of our people. 

Why, however, it may be asked, should any protection yet be 
needed ? For an answer to this question I would beg, my dear sir, 
to refer you to the following passage from a Report made but a few 
years since to the British Parliament, every word of which is as 
fully applicable to the trades in paper, glass, cloth, and chemicals, 
as it is to that in iron : — 

"The laboring classes generally, in the manufacturing districts of 
this country and especially in the iron and coal districts, are very 
little aware of the extent to which they are often indebted for their 
being employed at all to the immense losses which their employers 
voluntarily incur in bad times, in order to destroy foreign competi- 
tion, and to gain and keep possession of foreign markets. Au- 
thentic instances are well known of employers having in such times 
carried on their works at a loss amounting in the aggregate to 
three or four hundred thousand pounds in the course of three or 
four years. If the efforts of those who encourage the combinations 
to restrict the amount of labor and to produce strikes were to be 
successful for any length of time, the great accumulations of capital 
could no longer be made which enable a few of the most wealthy 
capitalists to overwhelm all foreign competition in times of great 
depression, and thus to clear the way for the whole trade to step 
in when prices revive, and to carry on a great business before foreign 
capital can again accumulate to such an extent as to be ablje to 
establish a competition in prices with any chance of success. The 
large cajyitals of this country are the great instruments of warfare 
against the competing capital of foreign countries, and are the most 
essential instruments now remaining by which our manufacturing 
supremacy can be maintained ; the other elements — cheap labor, 
abundance of raw material, means of communication, and skilled 
labor — being rapidly in process of being equalized." 

The " great capitalists" here referred to are steadily creating 
monopolies for themselves in Great Britain herself as well as in 
foreign countries. When they supply foreign markets at less than 
cost they do the same at home, and thus ruin the small capitalists 



8 



around them. Therefore is it that the iron manufacture and the 
ownership of mines are becoming from year to year more and more 
concentrated in the hands of a few wealthy men, who hold quar- 
terly meetings at which they decide how much coal shall be mined, 
how much iron is to be made, and at what prices the two may be 
sold. It is in the hands of just such men, immediate neighbors of 
those above described, that the consumers of paper are now labor- 
ing to place the control of the supply of the commodity they so 
much need. Whether or not it is in that direction they are to look 
for that increase in the competition for its sale without which there 
can be no reduction of prices, I leave it to you and them to judge. 

Notwithstanding the reduction of duty that had taken place, 
some few mills, as I am informed, were built in 1863. Others that 
had been closed were once again opened, and had the paper con- 
sumers been willing to let the matter rest where it had been placed 
by the act of March of that year, it is quite certain that the number 
of new ones would by this time have been so largely increased as to 
set at rest for all future time the question of supply. Had they 
so acquiesced, the competition at the present moment would, as I 
am well satisfied, be for the sale, and not for the purchase of paper. 
The tendency of prices would have then been downwards. 

That, however, they did not do. On the contrary, agitation for 
the total repeal of the duty was kept steadily up, with no effect so 
far as regarded the action of Congress, but with, to themselves, the 
most injurious effect upon the public mind. Up to that time there 
had still existed a strong belief that the necessity for revenue, and 
the growing conviction that it had been to protection we had been 
indebted for the power to pass through the great crisis of the rebel- 
lion, must suffice for making permanent the system that had been so 
well established. Now, however, it came to be seen that there was 
really no security, and that any one who should build a paper-mill 
would do it with the sword of Damocles always suspended over his 
head, and ever ready to fall. How this has probably affected the 
minds of hundreds of persons may be judged from a fact that is of 
my own knowledge. A year since, one of my friends, a man of 
large means, was preparing to make a great addition to the paper- 
producing power of the country, but of this idea he was entirely 
cured by the action of the paper consumers during the late session 
of Congress, and his works remain unbuilt. What is true of him 



9 



cannot fail to have been equally so of very many others similarly 
situated. Capital has been abundant, but it has not gone in the 
direction of mills for making printing-paper, nor will it do so while 
the agitation shall be continued. Capitalists are timid people. 
They see that the paper consumers seem resolved upon killing the 
paper producers, and are not yet quite ready to bow their heads to 
the axe. 

The agitation has now recommenced, and with redoubled force. 
It may be that our friends who are so anxious for cheap paper will 
this time succeed. If they shall do so, it is my prediction, and I 
pray you to note it, that, ere long, they will regret it far more bit- 
terly than will the men whose mills will then have been closed, and 
who will then have been ruined. For a very brief period they may 
have paper cheaper from abroad ; but as by degrees the weaker 
manufacturers are driven out of the business, the demand on Europe 
will steadily grow, and with that growth there will be an increase 
of the European prices that will make their paper cost them more 
than now, and that increase will be a permanent one. Those 
few among ourselves who can afford to stand aloof until the work of 
destruction shall have been accomplished will then step in and divide 
with the European manufacturers the profits of the market. Quar- 
terly meetings will then probably be held, at which it will be decided 
what is the price at which the consumers of paper will be permitted 
to obtain the supplies they need, and the latter will then discover 
that they have exchanged the rule of the quiet king Log for that 
of the active and energetic Stork, so well described by our old friend 
JSsop. Few of them will now, probably, be disposed to believe 
this, but they will realize its absolute truth should they this time be 
so unfortunate as to succeed in the work in which they are engaged. 
Unhappily for them, the damage will then have become irreme- 
diable. 

To those who may doubt the correctness of the views thus 
presented, I beg to recommend a consideration of the following 
facts : — 

Rags can be more cheaply brought to England, France, and Bel- 
gium than to these United States : 

Labor is there abundant and cheap, while here it is scarce and 
dear : 

The field for the employment of labor throughout the South and 



10 



West is likely to enlarge with such rapidity as to cause that scarcity 
and that dearness to continue for a long period of time : 

Iron is cheaper abroad, and machinery may there be obtained at 
greatly lower cost : 

Felting, bleaching powders, alum, and all other of the commodi- 
ties used in making paper, can be obtained free of the duty they 
must pay on entering here : 

Coal is cheaper, and steam is less costly : 

Interest is there little more than half of what is paid by the 
American manufacturer ; and — 

There is there no excise duty of three per cent. 

Such being a part only of the great differences between the two • 
sides of the Atlantic, can any reasonable man, proprietor of a news- 
paper, doubt that the " great capitals" of Europe will at once be 
set to work to crush out American competition for the sale of this 
great commodity, an abundant and cheap supply of which is now 
more important than it has been at any period of our history ? If 
any such there should prove to be, he would, as I think, only furnish 
new evidence of the perfect truth of the idea, that "whom the gods 
would destroy, they first make mad." 

Were I owner of the Tribune, Post, or Ledger, and in that 
capacity invested with full power to act for our friends of the Asso- 
ciated Press,- the change that is now asked for should not be made 
were the foreign manufacturers ready to pay into the treasury of that 
association, to be distributed pro rata, according to their interests, 
among the book and newspaper publishers of the country, thirty 
millions of dollars. Large as is this sum, I would reject it, and 
for the reason, that it would be no compensation for the damage to 
be done to the private interests of my associates, leaving wholly out 
of view those of the country at large. 

In regard to these latter, I will only call your attention to the 
fact, that the day is close at hand when we shall have to provide 
literary food for sixty millions of people, and that if they are to be 
at all supplied it must be by means of measures that shall tend to 
enable small manufacturers to accumulate capital and enlarge their 
operations so as to increase the competition for the sale of paper; 
and not by mean's of a present agitation which alarms the great 
capitalist and prevents him from investing his means in this depart- 
ment of manufacture, to be followed by a British free-trade policy 



II 



that cannot fail to bring with it utter ruin to all the smaller capi- 
talists already engaged in it. 

Ten yeafs since there was a similar agitation for the abolition of 
duties on railroad iron. It lasted several years, and, as I believe, 
until the revulsion of 1857 had taught us the advantages of the 
British free-trade system. During all that time no one could be 
found hardy enough to build either a mill or a furnace. After the 
revulsion there was great depression, as a consequence of which the 
consumption of iron in I860 was scarcely, if at all, greater than it 
had been a dozen years before, and yet the population had increased 
more than forty per cent. But for that agitation, we should to-day 
be producing thrice the quantity of iron that is now being con- 
sumed; we should be exporting instead of importing it ; the demand 
for gold would be less; and our people would be saving annually on 
their purchases of that one commodity fifteen or twenty millions of 
dollars. Just so will it be with our publishing friends. Their 
agitation of the past three years has already thrown us back at 
least one year. Let them now succeed, and they will throw them- 
selves back twenty years, for then no one can ever again have the 
smallest confidence in any change of system that may be made. 

If paper-making is really very profitable, let them build mills and 
thus promote competition for the supply of the market. In this 
way they will serve themselves and their country too. The intro- 
duction of new materials to take the place of the now deficient, 
cotton demands large investments of capital, but will in the end 
greatly lessen the cost of paper. Let them supply that capital. 
Pending the existing agitation others will certainly not do so. 

Having thus shown what, as I think, they owe to themselves, I 
• propose in another letter to show what are the privileges they enjoy, 
and what are the duties they owe to the community of which they 
are a part. In the mean time, allow me, my dear sir, to ask you to 
reflect for a moment on the moral of another well-known fable of 
JEsop, entitled "The Wind and the Sun." The more the former 
raged the more the traveller clung to his cloak, and the more 
closely he wrapped it around his limbs. Seeing this, Mr. Wind 
abandoned the effort, and made way for Mr. Sun, under the powerful 
influence of whose beams the cloak was quickly laid aside. Our 
friends have played the part of Wind for two years past, and with no 
other effect than that of raising the price of paper. Let them now 
take that of Sun — let them declare for a permanent peace — and 



12 



there will be more mills built in the next twelve months than have 
been built in the past three years, or will be so in the next half 
century if the war is to be maintained. 

Begging you now to excuse this trespass on your attention, and 
hoping that you may find in what I have written evidence of my 
sincere anxiety for the prosperity of the great publishing interests, 
I remain, my dear sir, with great regard and respect, 

Yours, faithfully, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, Dec. 24, 1864. 



THE PAPER QUESTION. 



LETTER SECOND. 

Dear Sir : — 

Hitherto, agitation in reference to the proposed repeal of the 
paper duty has been carried on through the public prints. Now, 
however, the course of operation seems to be entirely different, not 
an editorial line in reference to it having yet met my eyes, with the 
single exception of a brief article from the Evening Post, here 
given for the reason that always in the past it has been, and now 
is, my wish that our people should have the opportunity afforded 
them of seeing all that could be said on both sides of the great 
question of bringing the consumer to the side of the producer, and 
thus relieving the farmer from the oppressive tax of transportation 
to which he has so long been subjected. Had the Post, and its 
free trade brethren, followed the example, we might have been saved 
much of the loss and trouble of the past four years. The article 
referred to is as follows : — 

The Paper Duty. — "The duty on printing paper was, we sup- 
pose, intended by those who laid it to produce revenue to the trea- 
sury. Its only effect, however, is to put money into the pockets of 
the American manufacturers. The duty is twenty per cent, ad va- 
lorem; this is payable in gold, and it has made importation impos- 
sible. It does this in the following way : — 

"The manufacturers of printing paper here set their prices so as 
to leave no margin of certain profit to the importer who must pay 
a duty of twenty per cent., in gold, at the same time their profits 
enable them, if necessary, to undersell and drive out of the market 
with loss any one who should attempt to import. 

" Printing paper sold for from nine to ten cents per pound before 
the war. It is sold for eight cents per pound in Europe at this 
time. But in this country publishers are forced to pay for news- 
paper from twenty-four to thirty cents. Take off the duty and it 
can be imported for from seventeen to eighteen cents per pound, 
currency ; and at that price American manufacturers can still make 
and sell at a fair profit. 



14 



" A duty which yields no revenue is an absurdity. The present 
twenty per cent, duty upon paper is prohibitory, its only use is to 
take money out of the pockets of the public and put it into the 
pockets of a few already wealthy manufacturers. Even the govern- 
ment pays tribute, under present arrangements, to these capitalists 
for the immense quantity of paper it uses. The present Congress 
ought to remedy this wrong by repealing the duty on paper." 

That what is here given as fact in regard to the cost of paper, 
and the profits of paper-making, is wholly incorrect might readily 
be shown, but I have no desire to annoy you with the examination 
of little figures. It is greatly to the interest of the publishers of 
both books and newspapers that the makers of paper should be so 
well paid as to enable those who are in the business to extend their 
works, while stimulating outside capitalists to employ their means 
in erecting new ones; and if I could be assured that all were really 
as herein stated, I should most heartily rejoice at it in the interest of 
the paper consumers. Let it be clearly shown that paper-mills 
can be securely relied upon to yield ten, twelve, or fifteen per cent, 
per annum, and we shall see more new ones commenced in the next 
twelve months than have been started in the last decade. Let the 
work of agitation be continued and there will not be even a single 
one ; and that, too, even if it prove, session after session for the 
next ten years, to be wholly fruitless. The capitalist will not, 
with his eyes now fully opened, engage in a war with the Press. 
If, then, the monopoly here complained of be continued, our pub- 
lishing friends will have only themselves to thank for it. 

It is complained that the duty is prohibitory, and yet, making 
allowances for taxes imposed since 1860, the protection afforded 
is less than ten per cent. If, at such a moderate rate, the foreign 
traders of New York, admirable as they have always been in the 
manufacture of false invoices, cannot import paper, there can exist 
no shadow even of cause for complaint. As it seems to me the 
Post has proved rather too much. 

What, however, are the privileges now enjoyed by that and other 
journals ? Do they at all savor of prohibition ? Let us inquire. 

Five years since there were two branches of industry that were 
protected by means of absolute prohibition of foreign interference, 
the production of negro slaves, and that of newspapers. The Vir- 
ginia planter, anxious as he might be for free trade in iron, could 
manufacture his corn into chattels for which he could obtain eight, 



15 



or even ten times the price at which similar machines could be im- 
ported from abroad. Why was this ? Because Congress had pro- 
hibited foreign competition, and thus preserved to him the control 
of the domestic market. That branch of manufacture having, 
however, been since abolished, there now remains but a single one 
that profits by prohibition, and must, in all future times, continue 
so to do — that one being the newspaper. 

The Post, the Tribune, the Ledger, the North American, the 
Transcript, and the Daily Advertiser, cannot be produced abroad. 
Come what may — let us have war or peace, prosperity or adversity, 
free trade or protection — they must still be manufactured in New 
York, Philadelphia, and Boston. The control of the domestic 
market is thus secured to the domestic manufacturer, and by a law 
that can never be repealed ; and therefore is it that the consumer is 
supplied with information at less cost than in any country of the 
world. So will it be with paper whenever the consumers shall have 
arrived at the conclusion that the law which hag proved in their 
own cases so very true cannot fail to prove equally so in regard to 
the commodities in whose cheap production they are so deeply in- 
terested. 

Not only have the proprietors of these and other journals a 
monopoly of the general market of the country, as against foreigners, 
but they have, each and all, their shares in a monopoly that is not 
to be interfered with even by the domestic capitalist. To start a 
new paper in New York, and to continue it long enough to secure 
the circulation without which advertising cannot be obtained, is a 
work that certainly cannot to-day be accomplished at a cost of 
$250,000. It might cost much more than this, and even then it 
might prove a failure. So clearly is this understood that the pro- 
prietors of existing journals now laugh to scorn the idea of danger 
from future interference. 

Perfectly secure, then, against both foreign and domestic com- 
petition, those gentlemen are enabled to throw upon the public all 
of the burthen of which they now so much complain, the former 
one cent paper being now sold for two, and the two cent one for 
four — the difference being nearly the whole cost of the paper that is 
used. A pound will give 18 sheets for the first and 10 or 12 for the 
second, and thus the additional charge is little less than twenty cents 
per pound. In many cases it exceeds 25 cents per pound. Such 



IS 



paper may now, as I am informed, readily be bought for from 20 
to 23 cents. 

Turning next to advertising, we find New York journalists pro- 
fiting of their absolute monopoly by charging nearly as much for the 
insertion of a single line as formerly would have been charged for 
that of a whole square. Forty cents per line is, as I am told, the 
present charge of the Herald. In several of the weekly papers it is 
from $1 to $1.50 per line. Surely the persons who make such 
charges have little reason to complain of the present trivial duty 
upon the one great commodity they so much need. 

Secured thus, now and forever, in the enjoyment of one of the 
greatest monopolies of the world, the selling price of interests in 
these journals is wonderfully great. Shares in several of them can 
be sold, as I understand, at the rate of from three to five hundred 
thousand dollars for the whole, the purchaser paying in addition as 
much as may be considered the fair value of an equivalent share of 
the machinery in use. Elsewhere larger sums would, as I under- 
stand, be demanded, and when we should reach the highest figure it 
would probably prove to be little short of $800,000. 

Let this now be compared with the value of the property that is 
devoted to the production of printing paper, and then determine 
which of the parties to this suit it is that has most reason for 
complaint. There is not, as I am assured, and as I believe, a print- 
ing paper-mill in any of the Atlantic States that would sell for 
more than the actual cost of the buildings and machinery, while 
some, and even the best of them, may be had this day at much less 
than the actual cost. If the profits of such concerns are really as 
large as they are described by the Post to be, why do not the com- 
plainants purchase them and manufacture on their own account ? 
For the simple reason that the making of printing paper, on an 
average of the last half century, has been one of the worst paid pur- 
suits in which a man could be engaged. It would be difficult, as I 
believe, to find any one requiring as much intelligence and as much 
capital in which so few have acquired fortunes. 

On some recent occasion I have seen a statement of the wonderful 
growth in prosperity of the Post itself, and unless I am greatly in 
error in regard to the figures therein given, the mere good-will of 
that paper, which has cost no man even a single shilling, would 
sell for more than all the- buildings and machinery of the largest 
printing paper mill in the Union. 



17 



While presenting these facts I beg not to be regarded as at all 
complaining of the prosperity of journalists. The more they pros- 
per the more shall I rejoice, but not the less shall I object to their 
complaining of a miserable little item of protection, while they are 
becoming rich by help of an absolute prohibition established by 
nature herself, and not in any manner dependent on the caprices of 
Congress. The eagle suffers little birds to sing, and they, as I 
think, may well afford to permit the poor paper-makers to live and 
educate their children, even if they be not allowed to leave behind 
them any fortune. 

What is true of journalists is almost equally so in regard to the 
publishers of books. In former times Worcester, Albany, Pough- 
keepsie, Baltimore, Washington, and Richmond, competed with 
Boston, New York, and Philadelphia, in this department of manu- 
facture. Within these latter, too, there was a competition that 
made it very dangerous to fix a book at too high a price. Gradu- 
ally, machinery took the place of the human hand, and with every 
such improvement the business of publication more and more cen- 
tered itself in the three great cities, the reading public profiting, 
by means of cheap books, of all the changes that were made. The 
business grew, and with that growth came a division of employ- 
ments ; the various departments of literature obtaining each their 
special representatives. With' every step in this direction there 
came a diminution of competition accompanied by a rise of price, the 
result now exhibiting itself in this fact, that books are rapidly attain- 
ing the enormous English prices. At no time, as I am informed, and 
as I believe, have profits been so large. If this is so, as it probably 
is, surely the men who make them may permit their slaves to live. 
They must do so if they would continue to live themselves. Close 
the American paper mills, and most of them will be closed if 
Congress shall sanction the commission of the suicidal act that is 
now proposed, and we shall not long continue to hear of 15, 20, 50, 
and even as high as 100,000 dollars a year as the profit realized by 
the publishers of a single magazine or a single newspaper. 

The word slave has been used above, and most advisedly. Our 
people are divided into two great classes, those who can, and those 
who cannot, maintain direct commerce with the consumers of their 
products. The first constitute the privileged class vested witk 
power to control at their discretion the movements of the second, 
these last "living, moving, and having their being" at the plea- 
2 



IS 



sure of their masters. The owner of the railroad fixes for himself 
the terms on which he will permit the coal producer, or the traveller, 
to use his road ; and he adheres to his contract just so long as it 
suits him, and not an hour longer. He interprets the words of his 
charter to suit himself, well knowing that he is in the full enjoyment 
of a monopoly, and that he can set at defiance all efforts at resist- 
ance. It is through him, and him alone, that the railroad iron 
manufacturer draws his support from the public at large. He, 
therefore, may meet his fellow managers for the purpose of determin- 
ing in secret conclave exactly to what extent it may be safe to 
grind the poor producers of wheat, cotton, coal, and iron ; but let 
the iron producers hold a meeting and at once a cry is raised of 
combination to keep up prices and thus to rob the public, the aid 
of Congress being then at once invoked for the punishment of men 
who manifest such determination " to grind the faces of the poor." 

The book publisher deals directly with the public, and he arranges 
his prices to suit himself. Through him it is that the printer and 
the binder deal with the world at large. As a necessary conse- 
quence of this, the middleman builds a palace in which to transact 
his business, and another in which to live; while the poor printer, 
or the yet poorer binder, is forced to rejoice in the fact that he yet 
obtains the means with which to educate his children and to clothe 
himself. 

The maker of writing paper deals, if he pleases, directly with the 
outside world. He may open a shop when and where it suits him, 
as a consequence of which the stationer respects his rights. He, 
•therefore, has been permitted to retain all the protection granted to 
him by the tariffs of '61 and '62. 

Widely different is the condition of the maker of printing paper, 
for to enable him to maintain commerce with the world, he must 
have the aid of the publishers of books and newspapers. They are, 
therefore, his masters. If he and his fellow-slaves meet together 
to talk of their general interests, there is charge of "combination." 
The book is doubled in price, its publisher thus forcing the con- 
sumer to pay all his taxes, with the usual profits thereon to him- 
self, he himself, meanwhile, denying the right of the paper-makers 
even to consult together on the propriety of adding to their prices 
the simple amount of their contributions for the support of Govern- 
ment. 

The publisher of newspapers, secure in the enjoyment of his 



10 



monopoly, cares nothing about tariffs. The world may complain 
as it likes when he doubles, trebles, or even quadruples the charge 
for advertising, he well knowing that, like the collector of railroad 
tolls, or steamboat fares, he has but to ring his bell to have them 
all " step up to the captain's office and settle." Of all the privi- 
leged classes of the country he is the man who is most secure. If 
his hands turn out he calls on the public for aid in his contests with 
them, and forthwith, as has recently been seen in Boston, men of 
all classes come to his assistance. If, however, the poor paper- 
maker be found seeking to obtain some small compensation for a 
year or two of loss, he flies to Congress, talks of "combination 
prices," and insists that, while he himself enjoys entire and abso- 
lute , protection in the domestic market, his unhappy dependent 
shall be at once deprived of the little that has yet been left. Fully 
secured in the enjoyment of his privileges, he rejoices when the world 
is told that the value of the mere good-will of his establishment 
counts by hundreds of thousands of dollars, while denouncing as a 
monopolist the poor serf who furnishes him with paper, and who 
would gladly sell to him at cost, the mill in which it is accustomed 
to be made. He is, however, quite too wise to purchase. 

A story is told of an old contraband that may be worth repeat- 
ing here, as it tolerably well illustrates the positions of the parties. 
Corn being scarce while he had a large litter of pigs to feed/he was 
heard calling on Heaven to send the time when corn should be at a 
shilling a bushel and pork at two shillings a pound. The governing 
class having now put up their own pork to two shillings, are most 
anxious to reduce the price of their neighbor's corn. The road, 
however, in which they are travelling leads in another direction, as 
they will be sure to find if they shall continue on it until they reach 
its end. 

Throughout the whole range of this highly privileged order of 
beings there is none that has more steadily than the Post talked of 
freedom; none that has more persistently cracked the whip over 
the dependent class to which I have referred, producers of fuel, ma- 
chinery, and paper — hewers of its wood and drawers of its water — 
the men without whose services it could not live itself for even 
another hour. That such should continue to be the case now that 
the Government has become dependent for its existence on the in- 
ternal revenue is greatly to be regretted, and I cannot but hope 
that at no distant time the editors of this journal may come to see 



20 



that it is in efficient protection we are to find the true and only road 
towards freedom of trade and freedom for man. 

Before closing this letter allow me to ask your attention to the 
following paragraph telegraphed last week, by the Associated Press 
as I suppose, to numerous Northern journals : — 

"Cost of Paper. — The Superintendent of Public Printing re- 
ports to the Ways and Means Committee a deficit of five hundred 
thousand dollars in the appropriation for the purchase of paper. 
When the last appropriation was made, the contract price for book 
paper was eighteen cents a pound. Mr. Defrees's estimate was upon 
that basis. Congress subsequently imposed a heavy tariff on paper. 
Paper-makers rushed into a combination and raised the price of 
paper to the amount of the duty. The Government is now paying 
from thirty-one to thirty-seven cents per pound for what previously 
cost eighteen to twenty-one cents. The Treasury is receiving no 
revenue from paper, because none is imported, the duty being pro- 
hibitory." 

Allow me now, my dear sir, to ask you to answer to yourself if 
the manufacture of statements such as these does not furnish evi- 
dence of conscious weakness on the part of those by whom they 
have been written. The man who made this paragraph well knew 
that the rise of which he spoke had been mainly due to the fact 
that a severe drought had, during several months, diminished by 
one-half the producing power of a large portion of the Northern 
paper-mills, but of this he has said not even a single word. He 
knew, too, that so far from Congress having "imposed a heavy 
tariff on paper," the last Acts of that body relating to this branch 
of manufacture had been the increase of taxes on domestic products, 
and the reduction, by nearly one-half, of the duties on foreign ones. 
The article is throughout utterly inaccurate, yet is it given to the 
world in the columns of journals edited and published by gentlemen 
who would feel themselves much aggrieved were we, in regard to 
» private matters, to question their character for strict veracity. It 

is, however, but a repetition of the story of The Wolf and the Lamb, 
so well presented to us by our old friend iEsop. Determined to 
crush out his poor slave the master holds him responsible for all 
the accidents that have, in the last few months, diminished the sup- 
ply, while adding to his own charge as much as covers nearly the 
whole cost of the paper that is used. 

In presenting these views of a great question that has now, as I 
think, to be definitively, settled, I am animated by no feeling of un- 



21 



kindness towards any of the interests to which reference has been 
made. What I do desire is to awaken all to a clear conception of 
their mutual dependence. When that conception shall have been 
fully reached, but not till then, a settlement of all the difficulties 
may be made on terms that should be satisfactory to all, and certainly 
would be advantageous to both the people and the government. 
The proclamation of emancipation did much towards bringing about 
the entire extinction of negro slavery throughout the continent, but 
it was not until the 8th of November last that the people affixed to 
it the Great Seal of the Republic. The Chicago proclamation of 
emancipation for the white slaves of the North by means of effi- 
cient protection was but the preparation for that great measure. 
The Great Seal had. yet to be affixed, and the time has now arrived 
for doing it. 

What is the manner in which this vitally important result is to, 
be attained I propose to show in another letter, first, however, 
noticing the suggestions of the Post in reference to the very im- 
portant question of revenue. 

Meanwhile, I pray you, my dear sir, to accept the assurance of 
the sincere regard and respect with which I remain, 

Yours, faithfully, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, Dec. 26, 1864. 



THE PAPER QUESTION. 



LETTER THIRD. 

Dear Sir : — 

Among the characters personated by the elder Matthews, in his 
admirable monologues, was one of an old angler who was bit- 
terly hostile to the introduction of steam navigation on the ground 
that steamers "frightened the fish." Nearly akin to this, in its 
philosophy, was the idea of Mr. Walker, suggested in one of his 
Reports, that protection was injurious to the nation, and for the 
reason, that as domestic competition grew, prices declined with 
corresponding decrease of importation and of customs revenue. 
In his eyes the real saving of millions by the people was no suffi- 
cient offset to the apparent loss of thousands by the Federal Govern- 
ment. The loss had no real existence, the demand for sugar, tea, 
coffee, and a thousand other articles having always grown with a 
rapidity proportioned to that of the decline in the price of pins, 
needles, knives, and cotton. Following in the same direction the 
Post, participant in one of the most profitable monopolies of the 
world, assures its readers that " a duty which yields no revenue is 
an absurdity" — that it is "prohibitory" — that "it takes money out 
of the pockets of the public and puts it into the pockets of a few 
wealthy manufacturers," and that " Congress ought to remedy the 
wrong by repealing the duty on paper." Not a word, however, 
does it say about that natural prohibition which secures to its own 
proprietors the control of the domestic market for news, and gives 
to the mere good-will attached to its name a money value greater, 
probably, than that of any paper-mill in the Union, with all the 
land, the buildings, and the machinery of which it is composed. 

Nominally, the duty on printing paper is 20 per cent. ; really, it 
may perhaps be 15, but is more likely to be only 12^. Admitting, 
however, that the foreigner pays into the treasury 15 per cent., let 
us now compare that with what we know to be contributed for the 



23 



support of Government by the domestic manufacturer, and thus 
enable ourselves to judge of the expediency of moving in the direc- 
tion indicated by the Post. 

The latter pays, in direct tax, three per cent, of the market value 
of his products. This was paid, in the last fiscal year, upon more 
than $22,000,000, and the amount received by the treasury, from 
all descriptions of paper, was $663,447. All experience shows that 
taxes become more productive as assessors come more and more 
to understand their duties, and there is therefore good reason for 
supposing that the yield will, in the present fiscal year, be much in- 
creased. To this let us now add the tax on incomes, late three 
per cent., but now five, to be paid by "already wealthy manu- 
facturers," who would gladly accept, at the hands of the cer- 
tainly wealthy proprietors of the Post, cost for all their works. 
Next, add the taxes on all the steam, bricks, lumber, and iron re- 
quired for the erection of buildings, or for keeping them in repair. 
Further, add the amount paid as duties on soda ash, bleaching 
powders, alum, felting, and other commodities used in the manu- 
facture. Again, let us add the tax on coal, of which it requires, 
even where water-power is used, more than pound for pound of 
paper, and much more when steam-power is required. Putting all 
these now together we shall probably reach ten per cent., giving a 
sum exceeding two millions of dollars as the direct contribution of 
this single branch of manufacture towards the payment of our 
troops, and the discharge of interest on our debt. This large sum 
it is that the treasury is required to relinquish in order that the 
Post may, free of all such charges, buy its paper in Belgium, 
France, or England. 

The sacrifice thus far demanded by our publishing friends would 
appear to be quite large, and yet it is but a portion of that which 
really is required. The number of persons employed in the paper 
manufacture is stated at not less than 50,000. Putting their wages 
at an average of only $5 a week, we have $13,000,000. Of this, in 
the form of taxes on tea, coffee, sugar; &c. &c, there goes into the 
treasury probably $1,000,000, and thus do we obtain a total of 
$3,000,000 that we must relinquish in order that the British and 
Belgium manufacturer may be enabled to expel from our mills this 
large and interesting portion of our population. 

We may be told, however, that these poor people, if driven from 
the mills, will find other employment. What is likely to be the 



24 



nature of that employment may perhaps be inferred from the follow- 
ing extract from a circular issued by one of the charitable associa- 
tions of New York, bearing date a year and a half previous to the 
occurrence of the great free-trade crisis of 1857 : — 

" Up to the present, the Association has relieved 6,922 families, contain- 
ing 26,896 persons, many of whom are families of unemployed mechanics and 
widows with dependent children, who cannot subsist without aid. As the 
season advances the destitution will increase. Last winter it was thrice 
as great in January as in December, and did not reach its height until the 
close of February." 

It is in this state of things that immigration tends to die away, 
and here we find another of those sacrifices that we must make in 
order that our publishing friends may be enabled to buy their neigh- 
bor's corn cheap while selling their own pork at monopoly prices. 
What are the circumstances under which immigration grows, and 
what those under which it declines, I propose now to show, be- 
lieving a full understanding of them to be essential to a proper 
understanding of the tendencies of the movements now in progress. 

The first tariff really protective of the farmer in his efforts for draw- 
ing the consumer to his side, thereby relieving him from the oppressive 
tax of transportation, and from the slavery incident to a dependence 
on foreign markets, was enacted in the year 1828, and began, as we 
may reasonably suppose, to make itself in some degree effective in 
1 830. In the decade prior to this latter year the total immigration 
had amounted to 120,000, giving an annual average of but 12,000. 
Protection making demand for labor with large increase of wages, 
the effect soon exhibited itself in a larger import of persons who 
had that commodity to sell, and the immigration of 1830 amounted 
to 27,000. In the four following years it went steadily up until, 
in 1834, it had reached 65,000. 

By the Compromise tariff of 1833 it was provided that protection 
should be gradually diminished until, in 1842, the country should 
be replaced under a free trade despotism more complete by far than 
that which had existed prior to 1828. As a consequence of this, 
factories and furnaces ceased to be built, and the whole energies of 
the country were given to the construction of roads and canals, by 
means of which its products were to be enabled to reach the distant 
market. Its credit stood very high, the few years of the protective 
policy that had just then closed having enabled the government, in 
1835, to pay off the last remaining portion of the public debt. 



25 



Loans were therefore readily negotiated in Europe, and for a brief 
period there existed a glare of prosperity well calculated to deceive 
those who could not appreciate the great fact, that the raising of 
raw products for distant markets tended to exhaustion of the soil, 
and was the proper work of the barbarian and the slave, and of those 
alone. 

Three years only of the free trade system were required for pro- 
ducing the crisis of 1837, to be followed by the crash of 1839, and 
the almost universal bankruptcy of 1841 and 1842. During all 
this period immigration was of the most fitful kind, rising as moneys 
were borrowed abroad and roads were commenced at home, and fall- 
ing as bankruptcies grew in number and half finished roads were 
left to go to ruin ; but its annual average, notwithstanding the large 
extension of internal communications, scarcely exceeded the figure 
it had so rapidly attained in 1834, having been only 67,500. 

The two first years of the highly protective tariff of 1842, gave 
an average of 81,000. Thenceforward immigration grew steadily 
until, in 1847 and 1848, it reached an average of 234,000, having 
thus almost trebled in that brief period. The effects of the free 
trade tariff of 1846 were just then beginning to be felt. Mines 
thenceforward ceased to be opened, and mills and furnaces ceased to 
be built. Labor was everywhere in excess of the demand, and im- 
migration must rapidly have declined had not the discovery of Cali- 
fornian gold opened up a new branch of industry, calculated to 
operate largely on the minds of the miners and laborers of the 
world at large. 

The gold received at the United States Mint for coinage, in 1849, 
amounted to $9,000,000, or more than had been received from all 
the world in the six years from 1837-42. In 1850 it reached 
$32,000,000, and in the following year it rose to $62,000,000. Im- 
migration grew therefore rapidly, giving for the four years succeed- 
ing 1850 the following figures : — 

1851 . . . 408,000 1853 . . . 401,000 

1852 . . . 397,000 1854 . . . 460,000 

Up to that time gold washing had been very profitable, but thence- 
forward it became from year to year more clearly obvious that a 
continuance of the gold supply was to be obtained only by means 
tending to render the laborer a mere machine to be used by the 
capitalist. The demand for men for California was therefore at an 



26 



end, while that for the Atlantic States and the Mississippi Yalley 
tended steadily to decline, because of the constantly growing excess 
in the supply of labor consequent upon the closing of mills, furnaces, 
factories, and machine shops. Hence it is that the succeeding years 
furnish us with the following diminished quantities : — 

1855 . . . 230,000 1858 .... 149,000 

1856 . . . 224,000 1859 .... 155,000 

1857 . . . 271,000 1860 .... 179.000 

Small as are these figures, they would probably be diminished not 
less than 25 per cent, were we furnished with those that would be 
required for enabling us to ascertain the numbers of the disappointed 
who returned to Europe, or who left California to seek fortune in 
the more attractive gold deposits of Australia. At no period in the 
history of the country, as I believe, had the average rate of interest 
been so high as in the four years above referred to. At none had 
there been so great a tendency to decline in the reward of the laborer, 
and hence it was that immigration so rapidly declined. 

The Southern rebellion having at length emancipated the North, 
protection was re-established by means of that Morrill tariff, so much 
denounced by the Post; that tariff to which we are indebted for 
the fact that all Europe is now so largely engaged in manufacturing 
machines of 'the most valuable kind, to be presented to us, in free 
gift, by those who make them. While compelling us to give gold 
for silks and cottons, the nations beyond the Atlantic are willing to 
give us men and women who can not only spin and weave, but who 
can make the machinery by means of which spinning and weaving 
may be done, and at the same time reproduce themselves. Of all 
foreign products, they are the most costly and most valuable, and 
they are to be obtained at the cheap price of the steady pursuit of a 
policy that will make a market close to the farmer's door, and thus 
treble the price of his land. 

Under the Morrill tariff system, immigration in the last year, as 
shown in the records of the State Department, rose to 200,000, but 
to this must be added at least 50,000 who had been attracted from 
the British provinces, and of whom no record had been kept. In 
the present year there has been a large increase, and from both 
those sources ; but we are not yet in possession of all the figures re- 
quired for enabling us to give them with any approach to accuracy. 
Let us, however, go ahead with the protective system ; let us mani- 



27 



fest a fixed determination to bring the consumer close to the pro- 
ducer's door ; and the day will not then be far distant when the 
numbers of foreigners seeking to take their place among us will be 
as much in excess of those of present years as were those of 1847 
in excess of 1842. 

Protection looks to producing competition for the purchase of 
labor, and for that of the rude products of the farm, and therefore 
does it tend in the direction of freedom. British free trade seeks to 
produce competition for the sale of both, and therefore is it that, 
throughout the present war, it has shown itself the faithful ally of 
the men who teach that slavery is the natural condition of the 
laboring man, whether black or white. 

The more numerous the mills and furnaces the greater is the 
competition for the sale of paper, cloth, and iron, the greater is 
the tendency towards reduction of their prices, the greater is the 
competition for the purchase of labor, and the larger, as has here 
been shown, is the number of persons who come here to aid, by the 
consumption of sugar, tea, coffee, paper, cloth, and other commodi- 
ties, in the maintenance of that great domestic revenue to which the 
Government must in future look for payment of its annual expenses, 
and for the ultimate redemption of its bonds. Half a million of 
such persons coming here, and earning on an average but five dol- 
lars a week, would receive an aggregate of wages amounting to 
$130,000,000. Ten per cent, paid on this to the Government would 
be $13,000,000. The Post would shut them out, it being an " ab- 
surdity" to maintain on the statute book a law imposing a duty 
whose only effect was that of causing foreign workmen to come 
here and labor in our mills, eating our own food and wearing our 
own cloth, when men could be found abroad who might, perhaps, 
supply paper, iron, and cloth more cheaply, but certainly would 
apply their wages to the purchase of the food of Germany, France, 
or England, while contributing annually more than a tithe of their 
earnings to the support of foreign governments. The more such 
people came here, the smaller would be the tax of transportation 
paid by the farmer, the greater would be the value of his land, and 
the larger would be the amount of his contributions for the support 
of both the State and Federal Governments. How many ivould 
come under the system now advocated by the Post ? 

But a few years since that journal told its readers that "it would 
be better for all of them [the sewing women] in the long run, to 



28 

reduce wages to the famine point, so as to force all who had suffi- 
cient strength into other employments." Now, it would close the 
door to them in reference to that "other" one which makes demand 
for so much female labor, the manufacture of paper. Seeking 
some new "employment" they might, perhaps, find it in bleaching 
shops, where they would be required to compete, wholly unprotected, 
with British men, women, and children, who are, as shown in Par- 
liament, obliged to work 16 to 20 hours per day, and under a tem- 
perature so high that not unfrequently " the nails in the floors be- 
come heated and blister the feet of those employed in the rooms, 
usually called wasting shops, because of the extraordinary cost of 
life of which they are the cause." How much could our people, 
subjected to competition with such as here described, contribute 
towards the hundreds of millions of internal revenue of which we 
now stand so much in need ? Not very much, as I think. 

It is time that those gentlemen should awaken to the fact that 
there is a harmony in all the real and permanent interests of the 
various portions of society — the paper maker and the publisher — 
the farmer and his customers — the people and their government. 
When they shall do so they will, as I think, arrive at a proper 
comprehension of the present " absurdity" of admitting foreign 
paper at a duty of less, probably, than a sixth of its real value, and 
the still greater one of freeing the foreign manufacturer from all 
contributions for the support of government, while taxing our own 
to the extent of probably ten per cent. 

At the moment of writing this I find in one of our city journals 
a paragraph, copied from the Post, denouncing in regard to matches 
the precise policy it has itself so steadily advocated as that required 
to be pursued in reference to paper. It is as follows : — 

"Those (matches) made in the country are taxed, by stamps, over 
two hundred per cent, on the cost of manufacture. But at the same 
session a tariff act has been passed imposing a duty, quite nominal 
in comparison, on foreign matches. Now, Mr. Stevens's act ex- 
pressly provides, that (section 169) when any imported articles 
requiring stamps shall be sojd 'in the original and unbroken pack- 
ages' in which tbey were packed by the manufacturer, no penalty 
whatever shall be incurred by selling them without stamps ! Of 
course, manufacturers in Canada and Europe have only to pack 
their goods in one or a few boxes, for family use, and they save the 
tax. Match factories were at once removed into Canada, and for- 
tunes have been made in five months' recess of Congress by simply 



29 



adopting the means which our law took pains to provide for de- 
feating its own objects and ruining our own manufacturers." 

If it is wrong to "ruin our own manufacturers" by taxing their 
matches while admitting those of Canada duty free, can it be right 
to tax home-made paper while admitting free that furnished by the 
great capitalists of Europe ? It seems to me that it cannot, but I 
shall be glad to hear the argument of the Post in its defence. There 
will, as I think, be more consistency in the movements of that journal 
when it shall have arrived at the conclusion that protection is the 
true and only road towards perfect freedom of trade. 

In my next I propose to show what are, as they appear to me, 
the duties of all of us who desire to see the Government sustained 
not only throughout the war, but after peace shall again have 
visited our land, meanwhile remaining, my dear sir, 

Most respectfully yours, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 



Philadelphia, December 29, 1864. 



THE PAPER QUESTION. 



LETTER FOURTH. 

Dear Sir : — 

A few months since a bank of the New York Canal was swept 
away for an extent of many miles, as a consequence of which navi- 
gation upon that work was suspended, as I think, during several 
weeks. The disaster was at the time attributed to the operations of 
an active and industrious rat who had burrowed into the canal, 
thus making way for a column of water to pass in the direction 
from which he had come. At first very small, it rapidly increased 
in size and force, and finally produced the disaster to which I have 
referred. 

Precisely such an operation as this it is that is now going on in 
reference to the question of protection to the farmer in his efforts 
for drawing the consumer to his side, and thus relieving him from 
the present terrific tax of transportation. The first rat-hole was 
made in March, '63, when the paper-makers, after having been sub- 
jected to an infinity of taxes, were deprived of all the protection, 
little as it was, that had been granted to them by the tariff of '61. 
The second was made at the last session of Congress, when the 
taxes on home-made iron were almost doubled, while the duty on 
railroad iron was largely diminished. The hole made in '63 is 
now to be widened by means of the total repeal of the duty on 
paper. That accomplished, the opponents of the Government will 
find themselves emboldened to new efforts, and day by day we shall 
see the rat-holes increase in number and in size, until at length the 
whole work will be swept away, and with it all chance of any per- 
manent maintenance of the Union, or of any future payment of its 
debts. , 

The managers of the great combination that is now engaged in 
the performance of a work regarded by the British people as so 



31 

essential to their future greatness — the making of the rat-holes to 
which I have referred — are to be found among the men who have 
furnished the ships and men by which the blockade of Southern 
ports has been evaded ; those who have fitted out the pirate ships 
by means of which the flag of the Union has been almost entirely 
driven from the ocean ; those who have, in and out of Parliament, 
systematically endeavored to destroy the credit of our Government 
while vilifying our people; and those who see in the continued 
maintenance of the Union the writing on the wall which warns 
them that the day is close at hand when the people of Europe will 
demand for themselves that exercise of the privilege of self-govern- 
ment of which they have been so long deprived. They themselves, 
as well as their mode of operation, are so well described in the 
passage from a recent Parliamentary Report already cited, that I 
cannot refrain from reproducing it on this occasion, believing, as I 
do, that it should be read day by day, night by night, month by 
month, and year by year, until all our people, male and female, 
young and old, had become thoroughly penetrated with the convic- 
tion, that the British proceedings of the past four years had been in 
perfect harmony with all those of the previous half century, and 
that if they would not be made mere " hewers of wood and drawers 
of water" for British capitalists, they must learn to combine among 
themselves for the adoption of measures of resistance. It is as 
follows : — 

" The laboring classes generally, in the manufacturing districts of 
this country, and especially in the iron and coal districts, are very 
little aware of the extent to which they are often indebted for their 
being employed at all to the immense losses which their employers 
voluntarily incur in bad times in order to destroy foreign competition, 
and to gain and keep possession of foreign markets. Authentic 
instances are well known of employers having in such times carried 
on their works at a loss amounting in the aggregate to three or four 
hundred thousand pounds in the course of three or four years. If 
the efforts of those who encourage the combinations to restrict the 
amount of labor and to produce strikes were to be successful for any 
length of time, the great accumulations of capital could no longer 
be made which enable a few of the most wealthy capitalists to 
overwhelm all foreign competition in times of great depression, 
and thus to clear the way for the whole trade to step in when prices 
revive, and to carry on a great business before foreign capital can 
again accumulate to such an extent as to be able to establish a com- 
petition in prices with any chance of success. The large capitals 
of this country are the great instruments of warfare against the 



32 



competing capital of foreign countries, and are the most essential 
instruments now remaining by which our manufacturing supremacy- 
can be maintained ; the other elements — cheap labor, abundance of 
raw material, means of communication, and skilled labor — being 
rapidly in process of being equalized." 

Two centuries since, England sent her wool and her corn to the 
people of the countries on the Rhine, and took her pay for them in 
cloth and iron. To her it was a most unprofitable trade. To the 
Germans it was a most profitable one ; so profitable that all Ger- 
many wondered at the stolidity of a people who could tolerate its 
continuance. " The stupid Englishman," as then was said, " sells 
the skin of a rabbit for a sixpence, and buys back the tail for a 
shilling." That, my dear sir, is precisely what we have so long 
been doing — selling cotton at three pence a pound, and buying it 
back at a shilling an ounce ; and giving a bushel of corn for half a 
dozen pence, the pence themselves to be paid in the form of ounces 
of corn combined with pennyweights of the three-penny cotton. 
That sort of taxation it is that " the great capitalists" of England 
— the men to whom we are indebted for the prolongation of the 
war, for the expenditure of hundreds of millions of treasure, and 
the destruction of hundreds of thousands of lives — are determined 
shall be maintained in all the future. 

What are the measures by the aid of which it is that they propose 
to compel us to its maintenance ? To obtain an answer to this 
question, it is needed that we study a little of the history of the 
past. British free trade had, in 1842, so far impoverished our 
people that they were wholly unable to contribute to the support 
of Government, as a consequence of which many of the States had 
been driven to repudiation, and the National Treasury had become 
utterly bankrupt. That state of things it was which gave us, in 
the passage of the Protective Tariff act of 1842, a new Declaration 
of Independence. Under it, in less than half a dozen years, there 
was produced a change such as, to that date, had had no parallel in 
the history of the world. In that brief period the consumption 
of coal, iron, and lead was trebled, while that of wool and cotton 
was doubled. Furnaces and mills were built, labor was everywhere 
in demand, immigration grew with great rapidity, the public revenue 
became larger than was needed for meeting all the wants of Govern- 
ment, repudiation passed away, and prosperity once more reigned 
throughout the land. That, however, not suiting the " great capi- 



33 



talists" above referred to, proprietors of British furnaces and British 
mills, large sums were raised in 1846, to be so used here as to 
bring about a change. That they were so used in the Senate of 
the United States, there is no reason for the smallest doubt. By 
their aid the free-trade tariff of 1846 was made the law of the land, 
and from the date of its enactment mills and furnaces ceased to be 
built until California came with its golden treasures to stimulate 
our people temporarily into action. That tariff lasted eleven years, 
its existence having been terminated by the still more free-trade 
tariff of 1857, whose passage proved to be the signal for the crisis 
of that year which swept away, by thousands, the makers of paper, 
of cloth, of iron, and of a great variety of commodities for which 
we became thereafter dependent upon the "great capitalists" of 
Britain. 

In carrying on this British " warfare" against " the competing 
industry of other countries," the means used are very various, the 
object to be accomplished being, however, always that of carrying 
into full effect Lord Brougham's great idea of " destroying," at what- 
soever loss, " foreign manufactures in the cradle." The commence- 
ment of any new branch of industry has proved to be, and that, I 
believe, invariably, the signal for an inundation of our markets by 
goods to be sold at any price until the danger of American compe- 
tition should have been dispelled. A single case of this, the evidence 
of which is now before me, may here be mentioned. Ten years 
since, the price of rough plate glass being then $2 25 per foot, 
several factories were started, and with the fairest prospects of the 
most complete success. Forthwith vast quantities were sent here, 
and the price was reduced to 75 cents. As a necessary consequence 
our factories ceased to work, their owners were ruined, the " great 
capitalists," owners of millions, kept "possession of the foreign 
market," and prices returned again to the point at which it suited 
the millionaires to hold them. Cases of a similar kind might readily 
be produced in reference to numerous branches of manufacture. 

The grand secret, however, that one which can at will be made 
available in reference to every branch, is that which manifests itself 
in the production of agitation. These men know well that capi- 
talists are timid, and that past American experience is such as 
to warrant the extremest caution. When, then, at a commission 
of five per cent., they employed Messrs. Ashmun, Yinton & Co., 
during a period of several years, to agitate for the abolition of all 
3 



34 



duty on railroad iron, they knew that their objects would be fully 
attained even without the aid of legislation. They knew full well 
that while that agitation should be continued no man would be so 
insane as to risk his fortune in a furnace or a rolling-mill. When, 
now, they use the publishers of books and newspapers for the pro- 
duction of agitation in regard to paper, they have in view that they 
thereby not only stop the building of paper-mills, but also excite in 
the minds of our people the strongest doubts in reference to the 
maintenance of protection in regard to cottons, woollens, and every 
other department of manufactures. As the battle-cry of Danton 
was found in the words, de Vaudace, de Vaudace, et toujours de 
Vaudace, so is theirs found in those of agitation, agitation, and 
always and evermore agitation, for the accomplishment of the great 
purpose of crushing out all foreign competition for the purchase of 
the fruits of the earth, and thus compelling all the farmers and 
planters of the earth to sell their products in Great Britain, and 
there to make their purchases. To that unceasing agitation it is 
that we stand indebted for the waste of life and treasure that has 
been caused by the present great rebellion. To that it is that we 
are indebted for the fact, that we have been so long and so steadily 
engaged in selling to our British friends, those friends who have 
so consistently aided in the maintenance of the rebellion, rabbit 
skins for six pence apiece, and taking our pay in rabbit tails at a 
shilling. 

If we are ever to do otherwise ; if we are to pay the interest of 
our debt ; if we are at any future time to provide for payment of 
the debt itself; if we are ever again to witness a resumption of 
specie payments ; if we are to have any permanent maintenance 
of the Union ; if we are ever to attain that position among the 
nations of the world to which our vast natural resources and the 
extraordinary development of mind among our people so well entitle 
us ; if we are to do our duty to ourselves, to the world at large, 
and to the Great Being from whom we hold a power for the ad- 
vancement of the whole human race that is great almost beyond 
conception ; we must put a stop to this agitation. We must do that 
which will inspire in the minds of timid capitalists, both home and 
foreign, that confidence which will lead them to apply their means 
to the development of the wonderful wealth of fuel and of ores of 
every kind which now lies hidden beneath the soil of almost every 
State of this great Union. The more that this shall be done, the 



35 



greater will be the demand for labor; the stronger will be the tend- 
ency towards emigration from the shores of Europe; the greater will 
be the demand for the cotton of the South and the cotton goods of 
the East, for the fish of the Atlantic coast and the pork of the 
Mississippi valley ; the more rapid will be the growth of that inter- 
nal commerce so much required for binding together the different 
portions of the Union ; and the more perfect will be the power of 
our people to furnish the contributions required for the maintenance 
of the Government to which they will then be indebted for the 
blessings that have here been named. 

The amount required for the support of city, county, State, and 
Federal governments, and payment of interest on their various debts, 
cannot be estimated at less than $500,000,000. Of this perhaps 
$70,000,000 may be obtained at the Custom House. That amount 
can scarcely be very much exceeded, as it requires an import of little 
less than $200,000,000 

To this add— 
For payment of interest on our foreign debt, and 

dividends on stocks held abroad — . . . 30,000,000 
For expenses of absentees, temporary or permanent — 40,000,000 

And we obtain a total of $270,000,000 

This is more than we shall be able to pay until cotton, rice, tobacco, 
and naval stores shall once again take their places in our list of 
exports. Until now, the earnings of our ships aided in paying for 
foreign merchandise, but now the balance is against us, and to such 
an extent as must make a considerable addition to the above amount. 

To the Internal Revenue, therefore, must we look for little, if any, 
less than $450,000,000. To the enforcement of protection we must 
look for its enlargement, and thus it is that now, more than ever, 
we are to look to the tariff as the means of raising revenue. The 
more mills we build, the more mines we sink, the more water-powers 
we improve, the larger will be the value of land, and the larger will 
be the revenues of counties and of States. The greater the variety 
and extent of our manufactures the more numerous will be the 
exchanges, the greater will be the value of shops and warehouses, 
and the larger will be the revenues of towns and cities. The greater 
the quantity of commodities produced the larger will be the contri- 
butions of manufacturers towards the Federal revenue. The greater 
the demand for labor the higher will be wages, and the greater the 



consumption of tea and coffee, rice and sugar, to the great advan- 
tage of that revenue. The larger the reward of labor the greater 
will be the immigration of laborers, to the great advantage of the 
owners of the land, and of the men by whom it is tilled. The 
nearer the market to the farmer the richer will he grow, and the 
greater will be his power to make, without inconvenience to himself, 
contributions for the support of the governments of the State and 
of the Union. 

It is the reverse of all this, however, that is desired by the 
"wealthy capitalists" of Europe. They wish to separate the pro- 
ducer and the consumer, and thus to increase to the utmost the tax 
of transportation. They desire that mills and furnaces shall not be 
built. They would have our vast mineral wealth remain unde- 
veloped. They would compel us to carry rags and corn to England, 
to be returned in the form of paper. They would have the price of 
labor kept down to the "famine price," and thus destroy the exist- 
ing inducements to immigration. They would, if they could, drive 
the government into bankruptcy, and thus forever destroy all hope 
for any permanent maintenance of the Union. 

To that end, they would give us just such agitation as is needed 
for alarming the great and little capitalists, and preventing the 
extension of manufactures of any and every kind. The instruments 
of whose services they avail themselves are — 

I. Their own agents, the men in whose hands has now centred 
nearly the whole business of importation, and who generally succeed 
in passing their goods through the Custom House at far lower rates 
of duty than would be paid by our own citizens : 

II. Consumers who allow themselves to be dazzled by the idea of 
obtaining, for the moment, goods at low prices, and do not see that 
low prices abroad are a consequence of that American competition 
for the sale of similar commodities, in the destruction of which they 
allow themselves to be engaged : 

III. Politicians covetous of the spoils of office, and ready, 
Samson-like, to pull down the pillars of the temple, if by so doing 
they can secure the attainment of their ends. 

In the hands of men like these — honest men who suffer them- 
selves to be deceived, and dishonest men who desire to deceive 
others — it is, that "the wealthy capitalists" of England place "the 
great instruments of warfare against the competing capital of other 
countries," to be used in the West and the East, in the South and 



87 



the North, for the maintenance of that agitation which they see to 
be so much needed. So long as it is kept without the walls of 
Congress, it does but little harm. When, however, it reaches that 
body, and when it is thus made necessary for the makers of paper 
and cloth, iron and steel, to dance attendance, year after year, upon 
Congressional committees — seeing the sword always suspended over 
their heads by a single hair, and witnessing always how slight is 
the perception of many of their members of the importance of the 
questions to be decided, how trivial the arguments that are brought 
to bear upon their decisions — it becomes a great national grievance, 
demanding a remedy that shall likewise be national, and that shall 
interest the whole of the right-minded and honest people of the 
country in its application. 

In no other country can such difficulties exist. Throughout Eu- 
rope, and especially in England, the arrangement of revenue laws 
is the business of specially constituted bodies, with which the legis- 
lature readily concurs. With us it is wholly different, each particular 
portion of a bill having to be examined by men under the influence 
of local ideas of interest, themselves the result of foreign agitation, 
and conclusions being arrived at on one day of the discussion that 
are in direct hostility with those which had been adopted on the 
preceding one. As a consequence of this, the Executive is frequently 
compelled to affix his signature to bills of the highest importance, 
much of which he regards as wholly at war with the national 
interests. For this no Administration can provide a remedy, and 
this foreign agitation, with all its tendency towards destruction of 
confidence in the future, must be continued until the people them- 
selves shall furnish one. From what portion of the people, how- 
ever, can it come ? The poor women now employed in paper-mills, 
and likely to see themselves sent abroad to seek "other employment" 
in cities in which the remedy for their distresses is, according to the 
Post, to be found in the reduction of wages to "the famine point," 
can do nothing towards it. The workmen employed about mills 
and furnaces that are likely to be closed are equally powerless. 
The farmers, seeing themselves about to be deprived of the market 
hitherto furnished by the mill or furnace, are helpless for resistance ; 
while "the wealthy English capitalist," as we have seen, is all- 
powerful for assault. Whence, then, can resistance come? To 
what quarter may we look for quieting this unceasing agitation, and 
for restoring confidence ? To the men through whom the ivar upon 



38 



our people is made. They, and they alone, have power that, if 
properly directed, will enable the Government to put down agita- 
tion, and to establish and maintain such a revenue system as is 
now so much required. 

The daily production of paper is equal to the consumption, and 
nothing more. The withdrawal of the producers from the market 
would have the effect of teaching consumers to respect their neigh- 
bors' rights. Would such withdrawal be justified ? Not only so, 
but it would be difficult, in my opinion, to justify the former if they 
failed to address the latter in something like the following terms: — 

" Gentlemen: Nearly four years have now elapsed since the abdi- 
cation of Southern Senators and Representatives gave once more to 
the people of the North the power to assert their rights. Among 
the earliest measures consequent upon that abdication was a reduc- 
tion into law of the great idea of the approximation of consumer 
and producer, so enthusiastically adopted by the Convention which 
made the Chicago Platform. On that occasion the paper producer 
was restored to the position he had occupied under the British free- 
trade tariff of 1846, aud nothing more. Shortly after, the closing 
of Southern ports so far cut off the supply of paper material as to 
make it doubtful if the needed supply of paper itself could at all 
be furnished. Since then, our best efforts have been given to the 
utilizing of other materials, and much, if not even all, of our profits 
has gone in that direction. So untiring have been our exertions, 
aud so successful have they been, that now, notwithstanding a rise 
of wages that is wholly without a parallel — notwithstanding a 
duplication, even where not a triplication, of the cost of every 
article we use — and notwithstanding the imposition of taxes, direct 
and indirect, but little short of the duty on the foreign product — 
we are still enabled to supply you at such prices as wholly forbid 
the importation of paper from abroad. 

" While doing this, we have given support to 50,000 people who 
might otherwise have been unemployed. We have paid such wages 
as have enabled them to contribute largely to the support of Govern- 
ment. We have made a market for many millions of dollars' worth 
of rags, coal, iron, and other commodities, the producers of which 
have also made large contributions in the same direction. By fur- 
nishing a market for labor, we have contributed our full share 
towards making the country attractive to the millions of Europeans 



39 



who desire a change of homes ; and have in this manner aided in 
bringing many hundreds of thousands of foreigners to consume the 
produce of our fields, while engaged in opening mines, building 
houses, or clearing and making farms for their children and them- 
selves to cultivate. 

"Feeling that we have done our duty, both to you and the 
Government, we regret now to have to say, that the treatment we 
have received at your hands has scarcely been worthy of your general 
reputation as men of business, and as Americans. Prompted by 
'the wealthy capitalists' of Europe, you have been engaged in an 
agitation for the destruction of a manufacture that gives large sup- 
port to the Government, and have thus caused heavy loss to us, 
while involving in utter ruin some of the largest and most respect- 
able of the producers of the commodity you so much need. You 
have thus made of yourselves allies of the men who have furnished 
the means, the money, and the ships that have driven American 
commerce from the ocean. Like them, you are making war on the 
public revenue of the country, and should it prove that agitation 
had in our case been followed by success, further agitation in refer- 
ence to other branches of industry must be looked for, each in suc- 
cession resulting in greater loss of revenue, until at leugth the 
Government must become bankrupt, and the Union must present to 
the world a scene of utter chaos, farmers, manufacturers, and traders 
becoming involved in one common ruin. 

"Your power to make this war on the general industry of the 
country is wholly derived from us. Without our aid it cannot longer 
be prosecuted. Such being the case, we should deem ourselves guilty 
of positive crime were we to grant you further aid. So believing, 
we desire now to notify you, that at the close of a month from this 
date our mills will stop, and you will then be entirely at liberty to 
obtain, discharged of any duty, and at a cost to the public revenue 
of many millions annually, the cheap paper you so much desire. 

" Should you think it desirable to engage in the manufacture of 
an article that is to pay ten or twelve per cent, to the Government 
if made at home, while coming from abroad free of all such charge, 
we shall be ready to sell to you our mills, and think you can be 
assured that they may be purchased at what can be shown to have 
been their actual cost. Should you fail to accept this proposition 
you will probably find yourselves, and that at an early day, enabled 
to judge of the extent to which American competition for the sup- 



40 



ply of paper has tended to reduce its price generally, and thus to 
further the cause of civilization throughout the world. 

Yours respectfully, 

A. B. 
C. D. 
E. F." 

The view above presented is, as I fully believe, a perfectly accu- 
rate one, and I cannot but hope that the men who are now being 
persecuted may manifest the possession of both the patriotism and 
the resolution required for adopting the course of operation that 
there is indicated. If the country is to prosper — if the Government 
is to be sustained — if the Union is to be maintained — it is by means 
of a policy tending to the approximation of the producer and the 
consumer, and to the relief of the farmer from the oppressive tax 
of transportation, and by that alone, that those great and essential 
-ends are to be attained. 

The real payers of English taxes are the people of the countries 
that supply the raw materials of manufactures, and buy them back 
again in a finished form — those who sell the rabbit skin for a six- 
pence and then repurchase the tail for a shilling. The consequences 
of this are seen in the fact, that all such countries, poor, weak 
and despised, are compelled to submit to the dictation of the very 
people whom they are thus compelled to support. Protection 
against this tyranny we have at length obtained, and the result is 
seen in the fact, that our people are now enabled to contribute to the 
support of Government, and to do so with ease, tens of millions, 
when before they could with difficulty contribute the millions that 
were required. This, however, does not suit "the wealthy capital- 
ists" of Britain, and therefore do we find them tempting the con- 
sumers of paper and of iron to the work of opening holes in the 
tariff, well knowing that one which in the outset was large enough 
to pass only the body of a rat will very speedily become sufficiently 
large to pass that of an elephant. This must be resisted, and if the 
paper-makers shall now employ to its full extent the power that is 
in their hands, they will thereby earn for themselves the thanks of 
every patriot in the nation ; and of all who with me believe that 
there is a way to outdo England without fighting her — a peace- 
ful, pleasant road towards that thorough independence which shall 
enable us to respect ourselves while commanding the respect of the 
other nations of the world. 



41 



In another letter I propose to ask your attention to some facts 
concerning the iron manufacture, and meantime remain, my dear 
sir, with great regard, 

Yours respectfully, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 

Philadelphia, Jan. 2, 1865. 

Note. — Just as this letter is going through the press I find in the New 
York Herald an article on the subject, from which the following is an 
extract : — 

" There is a movement on foot to induce Congress to repeal the duty on 
paper. This movement originates out West, and with the editors of 
republican papers. Some time ago a number of these editors — princi- 
pally of Chicago and St. Louis papers — met and made their arrangements 
in the usual way to influence Congress on this subject. They adopted 
resolutions, appointed committees, delegates, and so on. Their resolutions 
denounced the duty as onerous to publishers and not beneficial to the 
Treasury; and their committees and delegates were sent around to influ- 
ence the press at large, to buttonhole Congressmen and other influential 
persons, and in all ways to make as much outside pressure as possible. 
We have been visited on the subject, and were at first glance disposed to 
aid in the movement, but on a little reflection we are opposed to the whole 
thing. We are in favor of the duty, and if Congress is disposed to in- 
crease it to one hundred or even five hundred per cent, it will be quite 
agreeable to us. 

"In our opinion the Western editors look at this subject through a pin- 
hole, and, consequently, only see a very small part of it. They never 
consider the subject in any light save that of their own particular interest, 
and, consequently, they do not understand it at all. They see that the 
price of paper is high, and they put down their heads and rush at the duty, 
which they suppose to be the cause ; but they rush in the wrong direction. 
The high price of paper is not in consequence of the duty, and an import 
duty cannot have any but the most temporary influence on that price. 
Import duties cannot have any permanent effect on articles that can be 
produced here of a satisfactory quality. If an article can be made here 
as well as in foreign countries heavy import duties will only affect the 
place where it is made. Import duties on such articles merely stimulate 
domestic manufacture. But, says the man who looks through the pinhole, 
import duties also protect domestic manufacture, and the high duty that 
makes the imported article dearer also makes the domestic article bring 
a higher price. This is not true. Import duties give the market to the 
domestic product, and the price of the domestic product is regulated not 
by that fact, but by demand and competition. If the price of paper is 
very high, and the demand is great, paper manufactories will spring 
abundantly into existence wherever capital seeks investment, and prices 
will find their natural level." 



THE IRON QUESTION. 



LETTER FIFTH. 

Dear Sir : — 

Oe all the metals there is none that, in its character of an instru- 
ment to be used for facilitating exchanges, does so much as is 
done by gold in promoting that combination of effort which is the 
essential characteristic of civilization. It is in that capacity only, 
however, that it performs such, service. Coming to the hands of 
men ready for use, it makes little demand for combination in its 
preparation, the golden particles found in the miner's pan being 
almost as fully fitted for man's service as are the large pieces sent 
abroad from the mints of this city or of London. 

Widely different is it with regard to that greatest of all metals 
by help of which we cultivate our fields, mine our coal, build our 
houses, and plate our ships. Coming to us in combination with an 
almost infinite variety of other materials, it requires all the aid that 
science can afford to make it fully available for human purposes. 
Century follows century, each in succession casting new light on its 
various properties, and with each of them is produced a power for 
greater combinations of effort, and a necessity for their existence. 
Thus promoting association it is the great civilizer, and therefore is 
it that in the extent and growth of its use we find the truest standard 
by which to test the existence and the growth of civilization. That 
admitted, and it cannot be denied, we may now proceed to inquire 
what has been the extent of its use among ourselves, and how far 
its several stages of growth and decline have been attended, on the 
one hand by peace and harmony at home, accompanied by growing 
steadiness of the societary movement ; and, on the other, by those 
frightful crises by which that movement has so often been arrested, 
and which can be regarded only as the evidences of growing bar- 
barism. 

Forty years since, our annual product of this greatest of all 



43 



metals did not exceed 50,000 tons. Under the semi-protective tariff 
of 1824 there was a steady increase, but it was not until after the 
establishment of the thoroughly protective tariff of 1828 that the 
manufacture attained any large development. By 1832 the pro- 
duct had reached 210,000 tons, and there was then every reason to 
believe that in a brief period the whole demand would be supplied 
at home. Prosperity then reigned throughout the land. Public 
and private revenues were large, and the national debt was in course 
of rapid annihilation. That, however, not being the state of things 
desired by "the wealthy capitalists" of England, railroad managers 
were set to work in and out of Congress, and railroad bars were 
made wholly free, while the duties on other commodities were 
left in a great degree unchanged. Shortly after this, however, 
agitation succeeded in producing a total change of system, the tariff 
of 1833 having provided for a gradual diminution of all duties, 
those on iron included, until, in 1842, they should stand at a dead 
level of 20 per cent. Thenceforward the building of furnaces and 
mills almost wholly ceased, the "wealthy English capitalists" having 
thus succeeded in regaining the desired control of the great Ameri- 
can market for cloth and iron that had been so nearly lost to them. 
As a consequence of their triumph there ensued a succession of 
crises of barbaric tendency, the whole terminating, in 1842, in a 
scene of ruin such as had never before been known, bankruptcy 
among the people being almost universal, the banks throughout a 
large portion of the country being in a state of suspension, States 
being in a condition of repudiation, and the national treasury being 
wholly unable to meet its small engagements. Only seven years 
before, under protection, it had paid off, to the last dollar, the debt 
of the Revolution. 

In 1832, as has been shown, the domestic production of iron 
having risen to 210,000 tons, civilization was rapidly advancing, 
with growing power among the people to contribute to the sup- 
port of Government. Ten years later, with a population one- 
third greater, the total production of iron being but 230,000 tons, 
we find a growing barbarism, attended with corresponding decline 
in the power of the people to pay for maintenance of the trivial 
fleets and armies that then were needed for self-defence. Such was 
the result of the employment by British capitalists of that "great 
instrument of warfare against the competing capital of other coun- 
tries," by means of which they have thus far succeeded in rendering 



44 



the Declaration of Independence, issued in 1776, a mere form of 
words, and so destined to remain until our people shall fully learn 
that combination for our subjugation needs to be met by combina- 
tion for self-defence. 

Universal distress producing a universal demand for remedy, it 
was furnished by the establishment of that highly protective tariff 
of 1842, under the influence of which, in less than half a dozen 
years, the production of iron was carried up to 800,000 tons, and 
the total consumption of foreign and domestic to 900,000. Six 
years previously, under British free trade, it had been only 300,000. 
Here was evidence of advancing civilization, and it was accompanied 
by that higher evidence which was furnished by the facts that indi- 
viduals, banks, and States resumed payment of their debts, while 
the treasury was enabled not only to meet the usual demands upon 
it, but also to provide, and that without the slightest difficulty, for 
the expenses of the war with Mexico. Throughout this period 
there was no excitement, nor was there any crisis. All was peace 
and harmony, and everywhere in the land there was evidence of 
rapidly advancing civilization. 

The proverb says most truly that " you may bray a fool in a 
mortar, yet will his foolishness not depart from him." Never, how- 
ever, has its truth been more fully proved than in these United States. 
Their people had been "brayed" in the British free trade "mortar" 
in the terrible period from 1815 to 1825. They had been restored 
to perfect health in the protectionist period from 1825 to 1835. 
They had again been "brayed," and to an extent that till then 
had not been paralleled, in the years from 1835 to 1842. Pro- 
tection had again restored them in the brief period from 1842 to 
1846 ; yet did they remain so "foolish" as to prove themselves once 
again open to the blandishments of their excellent friends beyond 
the ocean, "the wealthy capitalists" of Britain, who had been en- 
riched by means of buying their rabbit skins at sixpence each and 
then reselling to them the tails at a shilling, and who now found 
themselves in danger of wholly losing the "foreign markets" they 
had so long labored to secure. As usual, agitation was recom- 
menced. British agents, with stocks of cheap British goods, were 
sent to Washington, and the halls of the Capitol were granted to 
them for the exhibition of their wares. Large sums were raised in 
England, and politicians here were subsidized. Estimates were 
furnished to the Senate, in which it was shown that the taxation 



45 



imposed by the tariff was so oppressive that a ton of nails which 
could be bought for $90, really cost the purchaser $105 more than 
it would have done under a free trade system ; and that a pound 
of Missouri lead, that could then be bought in New Orleans for 
2f cents, actually cost the consumer three cents more than he would 
have had to pay had he been permitted to get his lead free of duty 
from Spain or England. Such were the "instruments of warfare" 
used on that occasion for beating down the system under which the 
country had so rapidly recovered from the effects of the free trade 
tariff of 1833. Such were the frauds by means of which the tariff 
of 1846 was forced upon a country that had already, in the short 
period of thirty years, twice been "brayed" in the free trade "mor- 
tar," and twice had found the effects thereof in an almost entire 
stoppage of the societary circulation, and an almost absolute bank- 
ruptcy of the farmers, traders, bankers, and manufacturers of the 
country. 

Nominally, that tariff came into operation at the end of 1846. 
Really, it became operative in the summer of 1848, the Irish famine 
of 184*7 having produced a state of things, both abroad and at 
home, that much delayed its destructive action. From that moment 
furnaces and rolling mills went gradually out of action until, in 1850, 
the quantity of iron produced had fallen to less than 500,000 tons. 
Was the deficiency made up by importation ? It was not, the im- 
port of that year having exceeded that of 1846 by only 270,000. 
The whole consumption was, therefore, little more than previously 
had been the domestic product alone. Nevertheless, our popula- 
tion had then increased but little less than ten per cent. We 
see thus, that while consumption advances under protection at a 
rate five times more rapid than that of population, it declines when- 
ever the "wealthy capitalists" obtain the control of the "foreign 
markets" to which they look with such great anxiety, and for which 
they are always ready to use that great "instrument of warfare" 
that we, in our marvellous folly, have placed in their hands, by 
means of selling skins for sixpence and taking our pay in tails at 
a shilling. 

The duty under the tariff of 1842 being specific, it underwent no 
change when prices fell in England. To its full amount, therefore, 
it constituted an obstacle to importation that it was for the 
British iron master to remove, paying the cost of removal out of 
his own pocket and into the Treasury of the Union. As a conse- 



46 

quence of this the import of rails in the fiscal year 1846— T, when 
the country was so highly prosperous, was but one-half as great as 
the average of the two years preceding the passage of the act of 
1842; whereas, the domestic production had risen to 41,000 tons, 
or little less than double the number imported in those thoroughly 
free trade years. The total consumption had more than doubled in 
the short period which had then elapsed, and had thus given evi- 
dence that thorough protection and civilization were marching hand 
in hand together. 

The tariff of 1846, with its ad valorem duties, came into opera- 
tion on the first of December of that year, the rate payable by iron 
being 30 per cent. Fraudulent invoices reduced it, probably, to little 
more than 20 per cent. American competition had greatly lowered 
the real British prices, as a consequence of which the amount paid 
into the treasury by foreign iron and the freight from England 
combined, during a period of several years, were less than the mere 
cost of transportation from the furnaces of Pennsylvania to the city 
of Boston. The "wealthy English capitalists" now profited, and 
to the fullest extent, of the opportunity thus afforded them "to de- 
stroy foreign competition and to gain and keep possession of foreign 
markets." In 1849 and 1850 the quantity of foreign rails forced 
on the American market amounted to more than 200,000 tons, 
while the domestic production of those years averaged but 16,500, 
although there then existed American mills capable of producing 
nearly 70,000, and those in a country in which eight years before 
not a single rail had yet been made. 

The furnace master found his market destroyed by the closing of 
the rolling mill, and the owner of the latter found himself being 
ruined by the liberal use that then was being made of those "great 
instruments of warfare," by means of which the "wealthy capital- 
ists" of England had so long been accustomed to annihilate "the 
competing capital of other countries." In their distress they called 
on Congress for help, but their cries were totally unheeded. British 
iron, at the then freights, and almost free of duty, could be delivered 
here, as then was shown, at $40 per ton; and railroad makers pre- 
ferred to pay that price for the miserable products of British fur- 
naces, to giving a sliding scale that would secure to the American 
producer, for sound and excellent iron, the small price of $50, which 
was all that then was asked. Closing their eyes to the fact that it 
was to American competition for the sale of iron they had been 



47 



indebted for the low prices of the British markets, they permitted 
that competition to be almost annihilated, and the competitors to 
be ruined. The fall of the domestic production from 800,000 tons 
to less than half a million, produced a necessity for dispensing with 
its use, or going abroad to purchase all the difference. Competition 
for purchase in the British market grew as this necessity increased, 
and therewith came the precise state of things so well described in 
the Report to which I have so frequently referred — the whole British 
iron trade having been "enabled to step in when prices revived, and 
to carry on a great business" before their American competitors could 
"establish a competition in prices with any chances of success." 
With the discovery of California gold there arose a great demand 
for railroad iron, and that demand was, for the first few years, sup- 
plied almost entirely from British rolling mills, the railroad makers 
paying $80 per ton, if not even more, when but a little before 
they had refused to the domestic producer a sliding scale that would 
have secured him in the receipt of $50. At enormous prices Britain 
supplied us, in the four years 1851-54, with no less than a million 
tons of railroad bars. The additional price paid in those years by 
American road-makers, as penalty for permitting American compe- 
tition to be crushed out, could not have been less than $30,000,000, 
all of which went into British pockets, and thus helped to prepare 
the way for that new evidence of growing barbarism which was 
furnished by the terrific crisis of 1857. 

In that crisis very many of our iron producers were totally ruined, 
and the ruin extended itself to all departments of industry connected 
with this branch of manufacture. The demand for coal diminished, 
and labor ceased to be required ; as a necessary consequence of which 
immigration rapidly declined, while emigration to Australia, com- 
bined with return of the many disappointed, withdrew from us pro- 
bably one-fourth of all who then were led to seek our shores. 

At the breaking out of the rebellion we had been for a whole 
decade in the ownership of mines that had yielded gold to the extent 
of more than $500,000,000, and yet we had not been able even to 
pay our way with Europe. Our foreign debts were probably equal 
to that sum in their amount. Our credit was so very low that there 
existed little disposition to purchase further supplies of bonds. As 
a consequence of this, the importation of railroad iron in the three 
years 1858-60 averaged but 88,000 tons, and the total consumption 
of iron, foreign and domestic, but little exceeded that of the closing 



48 



year of that prosperous protective period which terminated in 
1847-8. There is good reason for believing that it did not exceed 
a million of tons, and yet in the period which had since elapsed our 
population must have increased more than 40 per cent. Taking 
then the consumption of iron as the test of civilization, we are pre- 
sented with the following facts : — 

In the six years which followed the passage of the protective act 
of 1842 the consumption of iron trebled, while the population in- 
creased but 20 per cent. 

At the end of twelve years from the re-establishment of British 
free trade, there was but a slight increase, although the numbers of 
our people had grown 40 per cent. 

Bad as was all this, it was but the preparation for those further 
acts of barbarism which distinguished the close of 1860, and resulted 
in a civil war that has cost the country hundreds of thousands of 
lives, and thousands of millions of dollars. Seeking now to find 
the real cause of that war, and of the destruction of life and pro- 
perty of which it has been the cause, I would ask of you, my dear 
sir, to read again the Parliamentary Report of the British policy, 
and then to study carefully the following exhibit of the natural 
advantages of an important portion of the country that now pre- 
sents such a scene of devastation. 

The great backbone of the Union is found in the ridge of moun- 
tains which commences in Alabama but little distant from the Gulf 
of Mexico, and extends northward, wholly separating the people 
who inhabit the low lands of the Atlantic slope from those who 
occupy such lands in the Mississippi valley, and itself constituting 
a great free soil wedge, with its attendant free atmosphere, created 
by nature herself in the very heart of slavery, and requiring but a 
slight increase of size and strength to have enabled its people to 
control the southern policy, and thus to have brought the entire 
South into perfect harmony with the North and West, and with 
the world at large. That you may fully satisfy yourself on this 
head, I will now ask you to take the map and pass your eye down 
the Alleghany ridge, flanked as it is by the Cumberland range on 
the west, and by that of the Blue Mountain on the east, giving, in 
the very heart of the South itself, a country larger than all Great 
Britain, in which the finest of climates Is found in connection with 
land abounding in coal, salt, limestone, iron ore, gold, and almost 



49 



p 



every other material required for the development of a varied in- 
dustry, and for securing the attainment of the highest degree of 
agricultural wealth ; and then to reflect that it is a region which 
must necessarily be occupied by men who with their own. hands till 
their own lands, and one in which slavery can never by any possi 
bility have more than a slight and transitory existence. That done, 
I will ask of you here to reflect what would be now the condition 
of the Union had its policy for the last twenty years been such as 
would have tended towards filling this great free soil wedge with 
free white northern men — miners, smelters, founders, machinists — 
workmen of all descriptions — who should have been making a market 
for every product of the farm, with constant increase in the value 
of land and labor, and as constantly growing tendency towards in- 
crease of freedom for all men, whether black or white? Would not, 
under such circumstances, power have made its way to the hills, and 
would not iron, coal, limestone, and copper have been enabled to 
dictate law to the cotton kings — to the men who occupied on the 
river bottoms, and lived at ease at the cost of those of their fellow- 
men whom they bought and sold in the open market? Could we, by 
any possibility, have witnessed the present extraordinary state of 
things, had the policy of the country in reference to domestic and 
foreign commerce not been directed by the "wealthy capitalists" 
who are now so busily engaged in making rat-holes through the 
existing tariff, very moderately protective as it is? Most assuredly 
we should not. To them it is that we are indebted for our present 
troubles and our debt, and o/them it is we should exact the payment 
of it. That, however, we shall never do if we shall continue to sell 
rabbit skins for sixpence and take our pay in rabbit tails for a 
shilling. 

Why have we so long continued so to do ? Because, although 
Independence was declared in IT 7 6, we have never pursued the 
policy required for making the declaration any more than a mere 
word of small significance. With slight exception we have been 
governed by the great capitalists of Britain, and have pursued the 
precise system that was advocated in England before the Revolution 
as the one required for retaining the Colonies in a state of vassalage, 
and thus compelling them to so make the unprofitable exchanges to 
which I have referred. What was that system is fully shown in an 
English work of much ability, published in London at the time 
when Franklin was urging upon his countrymen the diversification 
4 



50 



of their pursuits, as the only road towards real independence, and 
from which the following is an extract : — 

"The population, from being spread round a great extent of fron- 
tier, would increase without giving the least cause of jealousy to 
Britain ; land would not only be plentiful, but plentiful where our 
people wanted it, whereas, at present, the population of our colo- 
nies, especially the central ones, is confined ; they have spread over 
all the space between the sea and the mountains, the consequence of 
which is, that land is becoming scarce, that which is good having 
all been planted. The people, therefore, find themselves too nume- 
rous for the agriculture, which is the first step to becoming manu- 
facturers, that step which Britain has so much reason to dread." 

Why, my dear sir, should Britain have so much dreaded combina- 
tion among her colonial subjects? Why should she so sedulously 
have sought to disperse them over the extensive tracts of land 
beyond the mountains ? Because, the more they scattered the more 
dependent they could be kept, and the more readily they could be 
compelled to carry all their rude products to a distant market, there 
to sell them so cheaply, as we are told by another distinguished 
British writer, "that not one-fourth of the product redounded to 
their own profit," as a consequence of which plantation mortgages 
were most abundant, and the rate of interest charged upon them so 
very high as generally to eat the mortgagor out of house and home. 
In a word, the system of that day, as described by those writers, 
was almost precisely that of the present hour. For its maintenance, 
dispersion of the population was regarded as indispensable, and that 
it might be attained, the course of action here described was recom- 
mended : — 

"Nothing can therefore be more politic than to provide a super- 
abundance of colonies to take off all those people that find a want 
of land in our old settlements ; and it may not be one or two tracts 
of country that will answer this purpose : provision should be made 
for the convenience of some, the inclination of others, and every 
measure taken to inform the people of the colonies that were grow- 
ing too populous, that land was plentiful in other places, and granted 
on the easiest terms ; and if such inducements were not found suffi- 
cient for thinning the country considerably, government should by 
all means be at the expense of transporting them. Notice should 
be given that sloops would be always ready at Fort Pitt, or as much 
higher on the Ohio as is navigable, for carrying all furniture without 
expense, to whatever settlement they chose, on the Ohio or Missis- 
sippi. Such measures, or similar ones, would carry off the surplus 
of population in the central and southern colonies, which have been 



51 



and will every day be more and more the foundation of manufac- 
tures." 

Having studied these recommendations in regard to the mainte- 
nance of colonial dependence, I will ask you now to study the work- 
ing of the British free trade system, and satisfy yourself that its 
advocates, the agitators of whom I have spoken, have been mere 
instruments of our foreign masters — closing our mills, furnaces, and 
factories, retarding the development of our great mineral treasures, 
preventing the utilization of our vast water powers, and in this 
manner scattering our people, in strict accordance with the orders 
of those British traders against whom our predecessors made the 
Revolution. 

Having now brought up this review of the iron trade to the 
period of the great rebellion, I propose in another letter to bring 
it down to the present time, and then to show what are the mea- 
sures by which we may be enabled to outdo England without fighting 
her , and thus establish a real independence. 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 



Philadelphia, Jan. 6, 1865. 



THE IRON QUESTION. 



LETTER SIXTH. 

Dear Sir : — 

The preparation seems to have now been made for boring 
another hole through the protective system that has recently been 
so well established. This time it takes the form of a protest, of 
course in favor of the public revenue, against duties on spool cot- 
ton, under which, as we are told, "foreign spinners are now suffer- 
ing in their attempts to contend against these heavy odds whereby 
importation is now stopped." Large exhibits are made therein of 
the quantity of gold that is thus prevented from passing into the 
treasury, but not a word is said in reference to the important fact, 
that, under the system which has thus far made us dependent on 
Britain for that important commodity, we have never yet been able 
to carry up our consumption even to the amount of six cents per 
head of our population. Selling cotton at three or four pence 
per pound we have been required to pay in gold, to the extent of 
millions of dollars per annum, for pennyweights of it combined with 
Russian and Egyptian corn, while the farmer of Iowa, unable to 
find a market for his grain, has found it expedient to convert it into 
fuel, and thus prevent its total waste. Here, as everywhere, we 
have been favoring the policy of slavery and barbarism, limiting our 
people to the raising of raw produce for the supply of distant 
masters, by whom they have been required to give the whole skin 
for a sixpence, receiving their pay in tails at a shilling. The 
answer to all that is now said in regard to the opening of the new 
rat-hole which is now proposed, is found in the words of the ex- 
cellent article from the Herald, a part of which was appended to a 
former letter : " If the price is very large and the demand is great, 
manufactories will spring abundantly into existence .and prices 
will find their natural level. 11 If the British manufacturers are 
really suffering in the manner above described, let them transfer 



53 



themselves and their machinery here ; let them bring their people 
with them to eat the food of Illinois and Iowa in place of that of 
Egypt ; let them do this and the price of their commodity will soon 
be so far lessened that our consumption will rise to 20 cents per 
head ; the Government will then receive, in the form of internal 
revenue, an amount far greater than these foreign agitators ever 
yet have paid at the custom-house ; and we shall then have made a 
further step towards enabling ourselves to retain at home the gold 
that we ourselves shall so much need when the time shall have 
arrived for using the precious metals in the place of paper. 

Having thus disposed of this new subject of agitation, the further 
examination of the great Iron Question comes now next in order. 

To British free trade it is, as I have shown, that we stand indebted 
for the present civil war. Had our legislation been of the kind 
which was needed for giving effect to the Declaration of Indepen- 
dence, that great hill region of the South, one of the richest, if not 
absolutely the richest in the world, would long since have been filled 
with furnaces and factories, the laborers in which would have been 
free men, women, and children, white and black, and the several 
portions of the Union would have been linked together by hooks of 
steel that would have set at defiance every effort of the " wealthy 
capitalists" of England for bringing about a separation. Such, 
however, and most unhappily, was not our course of operation. 

Rebellion, therefore, came, bringing with it an almost entire stop- 
page of the societary movement, with ruin to a large proportion of 
those of the men engaged in producing coal and iron who had still 
continued to exist notwithstanding the heavy losses inflicted upon 
them in the sad five years which had just then elapsed. More than 
at any previous period the Government stood then in need of iron, 
in all its shapes, from the needle with which the poor sewing wo- 
man makes the shirt, to the great sheet required for plating the 
enormous ship of war ; and yet, such had been the extraordinary 
policy of the country that, while fuel abounded rolling mills were 
idle and furnaces were out of blast, and the machinery for the needle 
and the plate had not as yet been permitted to take its place at any 
single point over our extensive surface. As a consequence, poor as 
was then our Government, and unemployed as were then so large a 
portion of our people, we were compelled to send abroad for millions 
upon millions of dollars worth of the machinery of war, and there 
to encounter all the obstacles that could decently be thrown in our 



54 



way by men who prayed openly for the success of the rebellion, and 
who, almost at the instant of its first occurrence, had, by royal pro- 
clamation, placed the rebel Government on a level with that which 
their predecessors had, in 1783, so unwillingly recognized. This 
great adversity had, however, brought with it a remedy that, if now 
properly applied, will cause our children and our children's children 
to look back to the period of its occurrence as that in which there 
had been an act of Providential interference in favor of a commu- 
nity such as had had no precedent in the history of the world, 
prompting, as it had done, men who for seventy years had wholly 
controlled the action of the Government, to abdicate their seats and 
leave the direction of affairs to those who represented the poor and 
despised "mud-sills" of northern States. So great an act of in- 
sanity had never before been perpetrated by any body of intelligent 
men, and, most fortunately, its perpetration occurred at the moment 
when the public opinion of the North had been prepared to profit 
of it. 

That preparation had come as a natural consequence of the terrific 
free trade crisis of 1857. Assembling in 1860, the politicians at 
Chicago accepted most unwillingly that new plank of the platform 
by which " protection to the farmer in his efforts for bringing the 
consumer to his side" was incorporated into the Republican creed ; 
and great was their surprise when they found that public opinion, 
and especially the opinion of the great Mississippi Yalley, had left 
them far behind. "We might have made it stronger," was the 
exclamation of one of its chief opponents after he had witnessed 
the enthusiastic applause with which it had been greeted. As yet, 
however, it could be nothing more than a declaration of good inten- 
tions to be carried into effect at some future time, the senatorial 
power appearing then likely long to remain in the hands of men 
who believed in human slavery as the corner-stone of all free govern- 
ment ; in British free trade as the means by which slavery was to 
be perpetuated and extended throughout this continent ; and in the 
" wealthy capitalists" of England, as the firm allies by whose aid 
their ambitious hopes were to be fully realized. To give prac- 
tical effect to the new Declaration of Independence, it was neces- 
sary that those men should abdicate, and happily for the North, 
and for the world, abdication was not long delayed. Protection 
then at once became the law of , the land, and under circumstances 
that should have tended to free forever the country from that agita- 



tion by means of which the British trader had so long controlled 
the societary movement, and had, with so much profit to himself, 
been enabled to fill the British treasury by means of taxes, direct 
and indirect, upon nearly all the foreign exchanges that our poverty 
had permitted us to make. Between skins at sixpence and tails at 
a shilling — cotton at cents per pound and cotton goods at shillings 
per ounce — corn at cents per bushel and wool and corn at dollars 
per pound — there was a large margin for the British trader and his 
superiors, and out of the taxes thus extorted have, to a large 
extent, the British nation and its government been supported by 
the people of these United States. Protection looked to the abo- 
lition of this taxation. That it has done much in that direction is 
proved by the great fact, that it has enabled us to contribute thou- 
sands of millions of dollars towards the suppression of the rebellion : 
that it has in so short a period given us a navy such as had been 
so long required for setting at naught the declaration that " not a 
flag but by permission spreads and that, notwithstanding all our 
vast expenditures, the productive power of the loyal States is greater 
at this moment than was that of the whole Union on the day on 
which, less than four years since, President Lincoln assumed the 
reins of government. 

The need for iron soon became very great. Great, too, was the 
disposition of iron men to exert themselves for the supply of the 
wants the rebellion had now created. The Government had just then 
pledged itself to stand by them in their contest for the market of 
the world, at home and abroad, with the men who had so long con- 
trolled "that great instrument of warfare" by whose judicious use 
their predecessors had so generally been ruined. The pledge was 
accepted, and the results exhibit themselves in the facts : — 

I. That the production of pig-iron has already been carried up 
to more than 1,300,000 tons, and that it has been made certain that 
large as is the quantity, it can with ease, provided that the labor 
can be obtained, be trebled in the next seven years : 

II. That the rolling-mills of the country have now a capacity of 
nearly 7 00,000 tons, and that the only difficulty now standing in 
the way of the production of that quantity of sheet and bars is the 
one resulting from the scarcity of labor : 

III. That the supply of railroad iron is now fully equal to the 
demand, and can be increased to any extent that may be required : 

IT. That the conversion of iron into steel has been so much ex- 



56 



tended as to free us entirely from any further dependence on the 
"wealthy capitalists" of Britain: 

V. That works required for the conversion of steel and iron into 
the various other machinery required for both public and private 
uses have been so extended as to enable their proprietors to meet 
the whole demand. 

The industrial history of the world exhibits nothing at all com- 
parable with what has here been done in regard to this great branch 
of manufacture. That it might be done every man who previously 
had been interested therein has been required to apply to the en- 
largement and improvement of his machinery not only every dollar 
that he could make, but, in very many cases, all that he could bor- 
row ; and this they have done in the false confidence that consumers 
of iron had at last so far profited of past experience as to have 
become convinced that the way to have good and cheap iron was 
to be found in the direction of stimulating competition for its 
manufacture; and not in that of annihilating American competi- 
tion for its sale, while promoting competition for its purchase from 
the very men who had always used their power in the direction of 
promoting agitation for the destruction of "foreign competition," 
and for enabling themselves to " gain and keep possession of foreign 
markets." 

That it was a false confidence you will, my dear sir, see, after you 
shall have accompanied me in a brief review of the proceedings of 
iron consumers which it is proposed now to make. When you shall 
so have done, you will, as I think, agree with me that it would be 
difficult to find in the history of the world a case in which the pro- 
verb given in my last had been more thoroughly applicable than 
it now is in reference to the iron consumers of these United States. 
Often as they had been "brayed" in the British free trade "mortar," 
their "foolishness" had not departed from them. 
- By the tariff of 1861 the duty on railroad iron was fixed at 
$12 per ton of 2,240 pounds, being less than one-half of the 
charge upon it as established by the tariff of 1842 — that one 
under which iron generally was so cheaply furnished that the 
total consumption of the country was in four years carried up 
from 300,000 to 900,000 tons. It should have been placed at a 
higher rate than this, and so it would have been but for the ex- 
ceedingly absurd and stupid jealousy which prompts so many persons 
to consider the iron manufacture the special property of Pennsyl- 



5? 

vania. Iron ore abounds in more than two-thirds of the States of 
the Union ; fuel, too, almost as much abounding as the ore demand- 
ing to be smelted; and it is to the great credit of Pennsylvania that 
her ironmasters have never in a single instance allowed themselves 
to be influenced by the narrow idea, elsewhere openly expressed in 
regard to other branches of manufacture, that it was needed to 
"keep protection down, lest it might stimulate domestic compe- 
tition." If there are any ironmasters in the country who can live 
without protection, they are those of that State. They are the 
men who have paid most dearly for their experience. To them the 
country is indebted for the fact that this great branch of manufac- 
ture, in nearly all its processes, is now ahead of Britain. They, 
however, know that Tennessee and Alabama, Missouri and Michi- 
gan, Virginia, Maryland, and Ohio, need protection ; and they desire 
that they shall have it, quite assured that in the wide extension and 
general prosperity of the manufacture in which they are so well 
engaged will be found the key to that universal prosperity which 
enables men to extend their roads, to increase and improve their 
machinery, and to do all those things that make demand for 
iron and thus furnish proof conclusive of advancing civilization. 
Least in need of it, they stand foremost in the demand for efficient 
protection, asking it in the interest of the country at large, and not, 
as is in so many other cases done, exclusively in their own. 

Accepting the rate of duty that had been fixed, they went 
promptly to work, and with the results that have been shown. 
The time came, however, when it became necessary to establish a 
system of Internal Revenue, and railroad iron was then subjected 
to a direct tax of $1 50 per ton, while upon coal and other com- 
modities used in its production heavy duties were imposed. Incomes, 
too, were required to contribute, the general rate of contribution, 
by both the manufacturer and the receiver of income, being fixed at 
three per cent. 

The war having thus produced a necessity for taxing both the 
materials of manufacture and its products, it was deemed proper to 
subject the foreign manufacturer to the payment of a like contribu- 
tion, and duties generally were raised to the extent of five per 
cent. To this, however, railroad iron was made an exception, the 
addition having been limited to the precise amount of the direct tax, 
$1 50 per ton, and no allowance whatever having been made for the 
taxes on coal, lime, machinery, or incomes. Such, my dear sir, was 



58 



the paltry spirit in which were met the men who were at that mo- 
ment, in their efforts to meet the wants of the Government, mani- 
festing a larger liberality than any other body of men that could 
have been produced in the whole extent of the Union. 

The necessity for further revenue becoming obvious, the last 
session of Congress gave us a new excise law by means of which 
pig metal was for the first time subjected to a tax, and that to the 
extent of two dollars per ton, the tax on coal being at the same 
time largely increased, and that on rails more than doubled, the 
general effect being that of giving a tax on the rail itself amounting 
to seven dollars per ton. 

To this must now be added taxes on lime and other raw mate- 
rials — taxes on machinery to a large amount — income taxes — taxes 
on licenses — taxes on sales — taxes on freights — taxes on leases — 
taxes on salaries — taxes on charters, notes of hand, and articles of 
agreement — the whole of which, when added to the $T already ob- 
tained, will give at least $8 50 as the contribution in these several 
forms to be paid by each ton of railroad bars. — Adding now to this 
the large increase, consequent upon the existence of the war, of 
state, county, township, and borough taxes — the contributions for 
obtaining volunteers and for maintaining their families, it will be 
found that the amount, under this new law, furnished by each ton 
of bars, for the maintenance of the contest, cannot be estimated at 
less than $10. 

Having thus shown what was the pressure brought by the 
Government to bear upon the men who were giving all their time, 
mind, and means to building up that great manufacture on which 
now rests the whole of our great societary machine, and upon whose 
success or failure is dependent the whole future of this Union, I 
propose in my next to show what were the measures at the same 
time adopted by the Government for enabling them successfully to 
compete with those "wealthy English capitalists" who were then 
giving all their time, mind, and means to the work of vilifying our 
people, destroying our credit, breaking our blockades, destroying 
our ships, and in every other way aiding a rebellion whose success, 
as they saw, could have no other result than that of reducing the 
country to a state of complete dependence. 

It is with great regret, my dear sir, that I make so many demands 
upon your time and attention, but the question now to be settled is 
one of so great importance that you will, I am sure, excuse me. 



59 



When the present war shall have been closed there will be another 
to be fought, and that one will be with England. By many it is 
desired that it may be a war of cannon balls ; but it is not now with 
such machinery that she chiefly seeks to fight us. It is in the Halls 
of Congress she is to be met, and the machinery with which we 
have successfully to meet her is to be found in the adoption of those 
measures which shall enable us most speedily to profit of that inex- 
haustible store of fuel and of ores that nature has placed at our 
command. So believing, and hoping that all my countrymen may 
soon be led to the conclusion that there really is a way to outdo 
England without fighting her, I am, with great regard and respect, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 



Philadelphia, Jan. 9, 1865. 



THE IRON QUESTION. 



LETTER SEVENTH. 

Dear Sir : — 

That the power to prosecute the war in which we are engaged 
has been derived mainly from the Mining States, must be obvious 
to all who take the trouble to reflect that for the force by which 
our mills have been driven and our blockade maintained, and the 
iron by means of which that force has been applied, the Union has 
had to look almost entirely to the mountains of Pennsylvania. But 
for the energy with which the mineral resources of that State have 
been developed the war could not have been maintained for even a 
single year. To their further development, and to that of her sister 
Mining States, the Union has now to stand indebted for its power 
to collect the revenue by means of which its credit is to be main- 
tained, its wars, present and future, to be carried on, and its debt 
ultimately discharged. Failing to secure that development it must 
itself prove a failure, absolute and complete. 

Seeing this, and it is so clearly obvious that it would appear dif- 
ficult that any should fail to do so, it might be supposed that coal 
and iron, as the foundation upon which now rests, and must in all 
the future rest, our whole societary movement, would, in these trying- 
times, and after the sad experience of the blessings of British free 
trade, have been regarded as entitled to peculiar care. That prior- 
to the last Session of Congress they had not been so regarded, and 
that, on the contrary, of the little that had been given by one hand 
much had been taken away by the other, has been already shown. 
That the movement since that time has been in the same unfortu- 
nate direction, it is proposed now to show. 

The total taxation of a ton of railroad bars, for the maintenance 
of the war, cannot be taken at less than $10. Before the passage 
of any tax law the duty had been fixed at $12, that having been the 
smallest sum to which it had been possible to obtain the assent of 



61 



the Mining States. Under the first tax law the charges of the 
Government to the domestic producer may foe taken as having been 
not less than $3, while the additional payment required of the foreign 
producer was limited to $1 50. Since then the former have been, 
more than trebled, and it would have been but just to carry up the 
latter to the same extent, thereby compelling the British iron 
master to pay $20. Instead of that, his contribution was reduced 
to the point at which it had stood on the day on which Fort Sumter 
fell. Such was the manner in which the decision of the Chicago 
Convention was carried into effect in regord to a manufacture upon 
the success or failure of which was wholly dependent the answer to 
be given to the questions as to whether or not the Government was 
to be sustained ; whether or not the interest on the debt was to be 
paid ; whether or not specie payments should ever be resumed ; 
whether or not the national debt should ever be discharged ? 

It may, however, be said that the duty of $12 is payable in gold, 
while the $10 of taxes are payable in paper, and such is certainly 
the case. That difference now constitutes the sole protection to 
this great branch of manufacture. When, however, is it to cease ? 
Who can tell what time is to elapse before some enterprising 
financier shall succeed in persuading the Government to the adoption 
of measures tending to the sudden reduction, at any cost to the 
people, of gold to par ? Such measures are, as we all know, now 
advocated in some of the most influential Republican journals, and 
they have, as I have good reason to believe, received the approba- 
tion of men of the highest standing connected with the Administra- 
tion. That they would be suicidal in their tendency cannot be re- 
ceived as furnishing even the slightest evidence that they will not be 
adopted, seeing that we have now before us evidence that gentlemen 
connected with railroads have so entirely failed to profit by ex- 
perience which should have taught them that the cheap British iron 
of 1864 was but the trap by help of which they were to be made to 
pay probably twice the price for just such iron, poor as it generally 
is, in 1866. Time and again have they and their predecessors been 
brayed in the British " mortar," yet has their " foolishness" not yet 
departed from them. 

The direct contribution of pig and bar iron to the revenue can 
scarcely this year be taken, as I think, at less than $5,000,000. Add 
to this the taxes on coal, lime, transportation, incomes, &c. &c. &c, 
and we shall obtain probably double that amount. This would 



62 



seem to be a large sum to put at risk, and yet it is as nothing com- 
pared with the extent of -risk that is to be incurred, the coal and iron 
trades of the country constituting the foundation upon which this 
day rests our whole system of internal revenue. Break them down, 
as they will be broken if the system be not promptly changed, 
and the Government will, before the lapse of even a single year, 
become so utterly bankrupt that its certificates of indebtedness will 
have little more value in the public eye than have this day those 
of the so-called Confederacy of the Southern States. 

To those who may entertain any doubts on this subject I would 
recommend reflection on the following facts : — 

L The consumption of iron is the test of growing civilization, 
strength, and power. 

II. That consumption doubled in the protective period from 1828 
to 1834, our numbers meanwhile increasing but 20 per cent. 

III. Eight years later, in 1842, with British free trade and an 
increase of numbers amounting to 30 per cent., the quantity con- 
sumed had made scarcely any progress whatsoever. 

III. Thence to 1848, under protection, with a growth of popu- 
lation of but 20 per cent., it trebled — having already reached the 
large amount of 900,000 tons. 

IY. Twelve years now follow, spent under the British free trade 
system, giving us — an increase of population to the extent of nearly 
40 per cent. — the great discovery of California gold with correspond- 
ing increase in the necessity for internal intercourse — and an increase 
in the consumption scarcely, if at all, exceeding 12 per cent. 

Y. In the three years that have now elapsed since the Morrill 
tariff became fairly operative, the population subject to it has been 
less by a third than that of 1860, and yet the consumption now 
exceeds 1,300,000 tons, having increased more than 30 per cent. 

In the first and third of these periods every branch of manufacture 
was prosperous, and the power of the people, at their close, to con- 
tribute to the support of Government was thrice greater than it had 
been at their commencement. 

In the second and fourth every branch of manufacture was pros- 
trate, and the power at their close to contribute to the support of 
Government had been almost entirely annihilated. 

In the fifth there has been an activity of commerce that before 
had not been paralleled, as a consequence of which our people have 
been enabled to contribute to the support of Government hundreds 



*>3 



of millions, and with far more ease than in 1860 they could have 
furnished tens of millions. Our whole experience proves, then, that 
power for maintaining the Government grows or declines almost 
geometrically as the consumption of iron increases or decreases 
arithmetically. 

Having reflected on the facts thus presented, I would now, my 
dear sir, beg you to answer to yourself if our iron consumers, in 
the course they have recently adopted, have not furnished proof 
conclusive that they are of the same race precisely with the Bour- 
bons, of whom it was said on their return to France on the down- 
fall of Napoleon, that they had not profited by their long experience 
of the troubles of exile to learn anything they had not previously 
known, or to forget any of the prejudices with which they had 
started. Both alike had been " brayed in the mortar" of experience, 
yet had they remained as " foolish" as at first. 

Such having been the course pursued in regard to this great 
fundamental branch of manufacture, let us now look to that pre- 
sented in reference to another and very subordinate branch that has 
just now been brought into discussion — that of spool cotton. By 
the tariff of 1861, the duty thereon was fixed at 24 per cent. By 
that of 1862 it was raised to 30 per cent. That of 1863 made it 
40. Again raised in 1864, we find it to be a combination of spe- 
cific and ad-valorem duties that compels the foreign producer to pay 
more than four times as much in gold as is paid by the domestic 
one in paper. The domestic iron producer, on the contrary, pays 
nearly as much in paper as the foreign one pays in gold. The 
domestic paper producer pays more than half as much in paper as 
the foreign manufacturer pays in gold, the great fundamental indus- 
tries being thus almost entirely abandoned^to the "tender mercies" 
of " wealthy English capitalists," while the minor ones are placed 
in a condition to feel themselves entirely secure. 

The "absurdity" of all this is most remarkable, the market for 
thread, cloth, books, and all other commodities being almost wholly 
dependent upon the prosperity of the great coal, iron, and paper 
producing interests. Such legislation would find its fittest legislator 
in the man who should spend his mornings in carefully trimming 
the branches of his trees while his evenings were as assiduously 
employed in cutting away their roots. 

To what cause is such "absurdity" to be attributed ? In great 
part to the existence of that powerful British combination so well 
described in the Report to Parliament heretofore given, and in no 



64 



inconsiderable part to a necessity that was, at the date of the Con- 
gressional action above described, supposed to exist for "punishing 
Pennsylvania." Almost inconceivable as it may seem that such 
should be the grounds on which was based the decision of one of 
the greatest of national questions, that it was so based there is not, 
as I believe, the smallest reason to doubt. Assuming it so to have 
been, it may not be, my dear sir, improper here to ask your atten- 
tion to a few facts in relation to the past and present of the great 
State which then was held to stand so much in need of punishment. 

As New England furnishes us the type of that portion of our 
population which has occupied New York, the northern edge of 
Pennsylvania, northern Ohio, Indiana, and Illinois, Michigan, and 
other Northwestern States, so do Pennsylvania and New Jersey 
give us the type of the population of a great belt of territory, 120 
miles in breadth, and ten times that in length, now containing more 
than 10,000,000 of as industrious and active people as can be found 
elsewhere throughout the world. When, therefore, Pennsylvania 
speaks, she does so as the representative of the opinion of all those 
millions, and therefore is it— and not because of her own particular 
strength — that it has grown into a proverb, that as Pennsylvania 
goes, so goes the Union. 

How has she gone in those two great crises which, since the peace 
of 1783, most have "tried men's souls" — those of the institution in 
1788 of the present government, and at later ones of the past four 
years ? Let us see. 

The Constitution, as adopted by the Convention of 1788, placed 
the smaller States, as regarded Senatorial representation, on an 
equal footing with the larger ones, and hence gave great offence to 
nearly all of these latter. The single exception to this was found 
in Pennsylvania, which, first of all to consider that great instrument, 
was first of all, with the single exception of the little State of Dela- 
ware, to ratify it. Months elapsed before her example was followed 
by Massachusetts and Virginia, while something closely resembling 
compulsion was required before it was accepted by New York. 

In that great crisis Pennsylvania, by her remarkable magnanimity, 
earned the title of the Keystone State, but whether or not it was 
then that it was given to her, I have no means of knowing. Cer- 
tain it is, that but for her prompt and decided action the Union, as 
it since has been, would never have been accomplished. 

Coming now to the second great crisis, that in which we are now 



65 



involved, let ns see how she has gone, and how far her action has 
tended to maintain that Union which had been indebted to her for 
all its previous existence. 

I. Scarcely had the first call of the President been fully met before 
she applied herself diligently to the creation of a large and fully 
appointed army, whose acceptance was urged upon the Government. 
Had it been accepted, the Bull Run battle would probably have had 
a very different termination. Had it not existed, the war might, 
and probably would, then have ended in the capture of Washington. 

II. In three years and a half she has furnished to the army, 
exclusive of militia and ninety days volunteers, above 300,000 men, 
or more than a tithe of her whole population. Had all the loyal 
States done as much, the whole number supplied by them would 
have exceeded 2,000,000. Always among the first, even when not 
actually first in point of time, she has never been behind any in 
point of numbers. 

III. Always ready in the field, she has been equally so at the 
polls. When New York had abandoned the national cause, and 
when the whole future of the country had become dependent upon 
the question whether she would, or would not, place herself side by 
side with that State and New Jersey and thus cripple the Federal 
Government, she gave in her adhesion to the great cause, and by a 
majority that, allowing for the absent troops, was greater than it 
had been at the first. Had she acted differently on that occasion, 
the war must have come to an end, and the Union must have ceased 
to exist. From first to last, therefore, she has proved herself to be 
the Keystone State. 

IY. In her Commercial Capital, she has given the most loyal 
city of the Union ; the one that has, in proportion to its means, 
furnished the largest contributions; that one which alone has fed 
the tired and hungry soldier, from whatsoever State he has hailed ; 
and that one towards which the cold shoulder of the Government 
has invariably been turned. 

Such having been the course which has so recently subjected her 
to "punishment," we may now, my dear sir, without impropriety, 
look for a moment to the machinery by means of which it has been 
administered. As it was at the time explained to me, it was as 
follows : Leader in the action was a British agent, representative 
of those " wealthy English capitalists," who furnish " great instru- 
ments of warfare against the competing capital of other countries," 
5 



66 



by means of which they "gain and keep possession of foreign 
markets." Iron being. abundant and cheap in England, a consider- 
able quantity had been shipped to him, and he was naturally anxious 
to economize the contribution to be paid thereon to the Federal 
Government — that one for whose destruction his masters were then 
so anxiously laboring. As it chanced, some little Western roads 
stood in pressing need of iron, and money was then so scarce with 
them that the saving of a few thousand dollars thereon was deemed 
a matter of much importance. For accomplishing that saving it 
was needed that they should obtain a change in the tariff law. 
Forthwith, they and their English friends set themselves to prove 
that the wear and tear of roads was twice as great as it really had 
been, the producing power of American mills being at the same time 
proved to be less than half of what we know to be its actual amount. 
Other roads, the managers of which were thus deceived, were led to 
lend their aid. To these were now to be added all of the men in 
Congress who desired to see the Government reduced to bankruptcy, 
and thus was formed a "ring" of size sufficient to "punish Penn- 
sylvania." The deed was done, and thus was at once destroyed 
all confidence in the permanence of a system that had been received 
by the world as confirmation by Congress of that remarkable ex- 
pression of the public will given at the Convention held in Chi- 
cago five years since. For its destruction there was given, as I 
believe, the vote of nearly every man who has on all occasions 
opposed the Government in its efforts to maintain the national 
credit, they well knowing, as I doubt not, that in crippling the iron 
manufacture, and in punishing its chief representative, they were 
rendering the largest service in their power to the rebellious States. 

That this is a correct statement of the means by which that dis- 
creditable action was brought about, I entertain no doubt. Admit- 
ting for the moment that it is so, does it not present a state of 
things of which we have reason to feel much ashamed ? In what 
other nation, making any claim to civilization, are miserable foreign 
emissaries permitted thus to prowl through the halls of legislation ? 
Were such things tolerated in England or in France, should we 
hold those nations in much respect ? Could they respect them- 
selves ? Can we claim the existence of anything like self-respect 
while such profligate and impertinent meddling with our affairs shall 
continue to be tolerated ? As it appears to me, we certainly cannot. 

Having shown the past of the great State which has thus, and at 



67 



the hands of a wretched foreign broker, received the "punishment" 
she had so well earned, I desire now to ask you to look for a 
moment at her present, with a view to the determination of the 
question what should be her action in the future. 

Four years since, she and Virginia presented the types of two 
great sections of the Union, the one north, and the other south, 
of Mason and Dixon's line, the Ohio and the Missouri. On one 
side was the freedom which always accompanies the connection of 
agriculture with manufactures. On the other was the slavery which 
always accompanies that exclusive devotion of labor to the work 
of supplying distant markets which Britain and Carolina have 
always sought to perpetuate. On both sides there existed a belief 
in the necessity for measures of protection, except in the single, and 
then dominant, State of Virginia. Since then, however, she has 
abdicated, and freedom has taken, or is now rapidly taking, the 
place of slavery throughout the whole of that region of country, the 
richest in the world in regard to metals of almost every kind. Her 
abdication has placed the punished Pennsylvania now in the lead of 
all the Mining States, embracing a territory of 600,000 square miles, 
throughout which coal, iron, lead, copper, gold, and other metals so 
much abound that labor alone is needed for carrying up, within the 
next twenty years, their production to an extent far greater than 
the present consumption of the entire world. To the development 
of that wealth we have to look if we would sustain the Government 
and maintain the Union. To it must we look if we would maintain 
our credit and pay our debts. To it alone can we look if we would 
sink so deeply the foundations of our great public edifice as to secure 
for it that stability of action which is needed to give it permanence. 
Upon this, however, through one of her little deputies, Britain 
has put her veto, thereby punishing Pennsylvania for making the 
attempt. 

What now should the latter do ? Should she sit still while the 
foundations of x)ur system are being undermined ? Should she 
tolerate a policy thus forced upon the nation by foreign agents, that 
must end in her own ruin, and that of her sister States ? Should 
she longer tolerate the impertinent interference of British brokers in 
affairs of such high importance ? That she should not, I feel well 
assured. What then should she do ? 

She ought to invite a Convention, representing the people of all 
the Mining States, in population - comprising probably three-fifths of 



68 



the whole Union, and in national resources, three-fourths, with a view 
to that combination of effort which is needed for enabling us to free 
the country from this foreign dictation. She should proclaim her 
intention to seek, by all constitutional means, to make of the De- 
claration of Independence something of more value than would be 
an equal quantity of mere blank paper. She should say to the 
people of the whole of those States, that she desired to secure for 
herself and them that protection which would enable them to unite 
in supplying the world, both abroad and at home, with iron, confi- 
dently relying upon a growth of demand that would keep pace with 
growth of supply, and thus furnish evidence of increasing strength 
and advancing civilization. To the people outside of the Mining 
States she should say, that the more iron made at home the greater 
would be the demand for cotton and sugar, and for cotton and 
woollen goods ; that among the various portions of the country 
there was a perfect harmony of interests ; that in her efforts at 
stimulating into activity the great resources of the centre, she was 
giving her energies towards securing happiness and prosperity to 
the people of the north, south, east, and west ; and, that in thus 
presenting a mode of outdoing England ivithout fighting her, she 
was doing that which was required for enabling all to enjoy in 
peace the grand results which must be obtained from the suppression 
of the great rebellion. 

Twice already in great crises has she proved her claim to her 
title of Keystone State. Let her do so once again ; let her now 
do what it is clearly in her power to do, for giving practical effect 
to the Declaration of Independence ; let her show to the world that 
power, wealth, credit, prosperity, and happiness, may be procured 
by means of peaceful measures that shall at the same time give us 
satisfaction for all past injuries received from abroad ; and she 
will thereby earn the thanks of every American, every friend of peace, 
every lover of his kind, every Christian throughout the world. 

Having thus shown what is, as I think, the duty of what is now 
the leading iron-producing State, I propose, in another letter, to 
show what it is that I deem to be the duty of the iron producers, 
and meanwhile remain, with great regard and respect, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, January 11, 1865. 



THE IRON QUESTION. 



LETTER EIGHTH. 

Dear Sir : — 

For every ton of railroad bars now made here, the maker is re- 
quired to contribute for the support of the war and for maintenance 
of the public credit, at least ten dollars. For every ton of British 
bars imported the manufacturer is required to contribute for the 
same purposes, the sum of twelve dollars. For every ton of the 
first transported, the producer is required to pay into the treasuries 
of American railroad companies, and to the owners of American 
vessels — both large contributors to the Public Revenue — a sum 
that is, probably, on an average, little less than twice as great as 
are the freights from abroad of that British iron which comes in 
British ships, owned by the men who are now using their best efforts 
in the advocacy, aud in the material support, of the rebellion. * Their 
vessels pay nothing in the shape of tonnage duties, nothing for the 
use of lights that are maintained by us at heavy cost, Their 
owners pay no excise duties on their iron. They have their coal free 
of duty, and at a third of the cost of that used by our ships. They 
are free from the thousand claims upon their means which now com- 
pel our people to such high charges as have almost driven from the 
ocean the Stars and Stripes. Those charges must continue if we 
would maintain the Public Revenue, and they must become from 
year to year more burthensome if we shall, by any error of legisla- 
tion, diminish the power of any great branch of manufacture to 
contribute to that revenue. 

Taking into view, then, the direct and indirect contributions of a 
ton of American bars, and placing them side by side with a ton of 
those made in Britain, the producer of the former has not alone been 

* I have now before me the transportation account of an establishment 
within thirty miles of tide-water, and otherwise favorably situated, from 
which it appears that the actual railroad charge for carriage of materials 
and iron was, last year, $13 40 per ton. 



70 



reduced to an equality with the latter, but to even a worse position, 
the British producer being now, in effect, protected against the 
American one, whereas, even under the British free trade tariff of 
1846, the mere revenue duty gave the latter some slight protection 
against the former. 

In opposition to this it will, however, be said, that British rails 
cannot now be imported without loss. That is true to-day, because 
the premium on gold still remains as a slight protection. To whom, 
however, are the iron producers indebted for it ? Is it to the iron 
consumers ? Is it to that greatest of all consumers, the Government 
— that one which has just decided that to that premium alone the 
producer shall look in all the future for protection against those 
" wealthy English capitalists," by whom they have so frequently been 
crushed ? It is not ; so directly the reverse of this is it, that every 
branch of that Government is now striving to put down the price 
of gold, and thus to deprive that greatest of all our manufactures 
of the little protection that has been left. But recently, as there 
is the best reason for believing, a proposition has been made to it 
on the part of these " wealthy capitalists," having specially in view 
a great reduction in the price of gold ; such a reduction as will, if 
it shall be carried into effect, place the whole iron manufacture, and 
many other departments of our now so greatly varied industry, en- 
tirely at the mercy of the men who "voluntarily incur immense 
losses in order to destroy foreign competition, and to gain and keep 
possession of foreign markets." Whether or not that particular 
proposition, or any other looking in that direction, will be accepted, 
no one can now venture to predict ; but it requires little of the spirit 
of prophecy to venture on the prediction that if, in the present state 
of our tariff legislation, any one at all like it shall be accepted, it 
will bring with it such reduction of the Internal Revenue as must 
result in bankruptcy of the Government, to be followed by Revolu- 
tion. 

From that Government the iron producer has now, practically, 
no protection whatsoever. Does he, then, owe to it, in its character 
of iron consumer, the performance of any act of duty ? As it seems 
to me, he does not. Even in feudal times protection and service 
went hand in hand together, the right to demand the latter ceasing 
with the power to afford the former. Admitting, then, the facts to 
be as I have stated them, are not the iron producers now free for 
the adoption of whatsoever measures they may see to be required 



71 



for self-protection? That they are so, I fully believe. Still further 
do I believe, that as men who desire to protect the public revenue, 
maintain the public credit, and restore the country to a condition of 
peace and union, and as citizens anxious to free it from the control 
of foreign agitators who are in every manner seeking the accom- 
plishment of disunion, it is their duty to combine together in oppo-. 
sition to the present combination for our subjection, and for the 
re-establishment of a state of colonial dependence that, should the 
present effort prove successful, will be more complete than it has 
been at any period since the Peace of 1783. 

So regarding the question that is now to be settled, it is my belief 
that a sense of duty should prompt the iron producers to address its 
consumers in the following terms : — 

Gentlemen : — 

Forty years since, notwithstanding our wonderful superabundance 
of fuel and of ore, the iron manufacture htd among us scarcely an 
existence. The largest furnace in the Union could not produce 1500 
tons a year, and the total product of pig metal was under 50,000. 
In 1828, now but 36 years since, there was passed the first Tariff 
Act based on the idea that the producers and consumers of food, 
cloth, and iron constituted one great family, all of whose interests were 
in perfect harmony, each with every other. To enable the food pro- 
ducer readijy to obtain iron, he must have the miner brought near 
to him, thus to give value to the coal and the iron lying beneath 
his land. To enable the producer of iron to obtain cloth, it was 
deemed necessary that the spinner and the weaver should be brought 
from abroad to eat the food while spinning and weaving the wool. 
To enable the ship owner to obtain large return freights, it was 
deemed necessary to secure to the immigrant certain and well-re- 
warded employment. To enable the proprietor to sell his land, it 
was deemed necessary to bring the market to his door, and thus 
relieve him from the oppressive tax of transportation to which he 
had been so long subjected by the British system. By that tariff 
all those things were provided for, the entire harmony of all real 
and permanent interests being thus established. The result ex- 
hibited itself in the facts, that before the lapse of a time equal to 
^ that of a single presidential term the consumption of cotton and 
woollen goods had nearly doubled, that of iron nearly trebled, while 
that of coal had almost tenfold increased. As a consequence of 



^2 



this there was large consumption of tea, coffee, sugar, and other 
foreign commodities, the public revenue was great, the national 
treasury was full, and the public debt was in rapid progress to- 
wards that entire extinction which occurred in the following presi- 
dential term. 

The great improvement in the condition of our people which thus 
was proved, found its base in the great development of the mineral 
resources of the country. Without power machinery could not be 
driven, nor without machinery could cloth be made. As a means 
of securing that development, the consumers of iron had pledged 
themselves to protect its producers against a foreign combination 
whose modes of operation are well described in a Report to Parlia- 
ment, made but a few years since, from which the following is an 
extract : — 

"The laboring classes generally, in the manufacturing districts of 
this country and especially in the iron and coal districts, are very 
little aware of the extent to which they are often indebted for their 
being employed at all to the immense losses. which their employers 
voluntarily incur in bad times, in order to destroy foreign competi- 
tion, and to gain and keep possession o f foreign markets. Au- 
thentic instances are well known of employers having in such times 
carried on their works at a loss amounting in the aggregate to 
three or four hundred thousand pounds in the course of three or 
four years. If the efforts of those who encourage the combinations 
to restrict the amount of labor and to produce strikes were to be 
successful for any length of time, the great accumulations of capital 
could no longer be made which enable a few of the most wealthy 
capitalists to overwhelm all foreign competition in times of great 
depression, and thus to clear the way for the whole trade to step 
in when prices revive, and to carry on a great business before foreign 
capital can again accumulate to such an extent as to be able to 
establish a competition in prices with any chance of success. The 
large capitals of this country are the great instruments of warfare 
against the competing capital of foreign countries, and are the most 
essential instruments now remaining by which our manufacturing 
supremacy can be maintained; the other elements — cheap labor, 
abundance of raw material, means of communication, and skilled 
labor — being rapidly in process of being equalized." 

That pledge having been accepted, large amounts of capital had 
been applied to the opening of mines, the building of furnaces and 
mills, and the construction of the roads and canals required for 
carrying their products to market, thereby laying the foundation of 
a coal and iron trade that, had it been permitted to obtain develop- 



T3 

ment, would long since have placed the country in a position to 
become the great exporter of iron and of machinery, and thus to 
take the place that till then had been occupied by England. That 
pledge however, unfortunately for the country, was not redeemed. 
Then, as always before, agitation in and out of Congress was 
resorted to for the purpose of striking down this great and funda- 
mental industry, and thus relieving the " wealthy English capi- 
talists" from all danger of future interference. As a consequence 
of this railroad bars were made free of duty in 1832, and thus were 
furnaces deprived of the great market opening in that direction for 
their products. Next, and in the following year, the whole tariff 
was subjected to a process by means of which iron and all the 
manufactures in which it was required were speedily to be deprived 
of all protection. Confidence in the future now wholly passed 
away. Mills and furnaces ceased to be built. Financial crises fol- 
lowed closely one upon another, with the necessary result of almost 
annihilating the value of the vast capital, counting by tens of mil- 
lions, that had been applied to the development of the two great 
industries upon which then depended the whole future of the Union. 
It was a destruction of property till then without a parallel in 
history, to have been accomplished by the act of the very people 
who were destined most to suffer under it — the producers of food and 
the consumers of iron. The one lost his market among the men 
who mined the coal and ore and made the iron, and the other found 
that the impoverished farmer was unable to buy cloth. In crushiug 
out these two great industries the iron consumers, your predecessors, 
had, Samson like, torn down the pillars of the Temple, and had 
involved themselves and their Governments, Municipal, State, and 
Federal, in one common ruin. Railroads, constructed by aid of 
cheap and worthless British iron made from a long accumulation 
of cinder, fell so much in value that their proprietors were unable to 
sell their shares at any price. Workshops were closed, and work- 
men were everywhere reduced to ask for alms. Spinners and weavers 
shared the same sad fate with the miner and the founder. The 
trader, unable to collect the moneys due him, was unable to pay the 
bank, and the banker followed him in stopping payment of his debts. 
The National Treasury, reduced to bankruptcy, was unable to borrow, 
on any terms, the amount required to make amends for the deficiency 
thus" produced in its then trivial revenue. Chaos had come again — 
the same chaotic state of things that had preceded the passage of 



n 



the Protective Act of 1824. It had come, too, as a consequence of 
the inauguration of a government of foreign traders who sought 
monopoly, and talked of freedom of trade. How free it was, has 
been shown in the passage from the Parliamentary Report we have 
above submitted to your consideration. How profitable it had been, 
was proved by the fact, that, notwithstanding an increase of one- 
fourth in population, the consumption of iron had scarcely at all 
increased. 

For all this a remedy needed to be found. It came in the form 
of the tariff of 1842, by which the American people once again 
pledged themselves to the capitalist, that if he would apply his 
means to the development of those great mineral resources of the 
country which constituted the foundation upon which, alone, could 
rest securely our social edifice, he should be protected against those 
" wealthy capitalists" who had so long been accustomed to regard 
temporary losses as merely a mode of employing their great " in- 
strument of warfare" in the manner most efficient for the accom- 
plishing of the one great purpose, that of " destroying foreign com- 
petition and gaining and keeping possession of foreign markets." 
The pledge thus tendered was accepted, and in a period brief almost 
beyond belief mines were opened, roads were constructed, and fur- 
naces and mills were built, capable of supplying a consumption 
thrice as great as had been that of 1842. With that increase in 
quantity came such improvements and economies in the mode of 
manufacture as rendered it absolutely certain that, if faith should 
be kept with the men who had thus given time, mind, and means 
to the most important of all manufactures, but a brief period 
would be required to elapse before they should be enabled to supply 
the outside world with iron, and thus to furnish new evidence that 
protection was the road that led most certainly in the direction of 
perfect freedom of trade. At no period in our history had the de- 
mand for labor been so great. At none had there been even an ap- 
proach to the number of immigrants who then sought our shores. 
At none had property commanded so large a price. At none had 
public and private credit been so complete; and yet, but five years 
previously, labor had been everywhere in excess ; immigration had 
tended to die away ; property had been wholly unsaleable ; bank- 
ruptcy had been almost universal ; and the public treasury had 
found itself wholly unable to command the means required for com- 
pliance with its engagements. 



75 



As before, however, the public faith was violated, and because of 
agitation caused by British agents. Almost without notice the pledge 
given in 1842 was withdrawn in 1846, and the men who in full 
reliance upon it had applied their millions and tens of millions to 
carrying in effect the public will in reference to the great work of 
internal development, were once more delivered over, bound hand 
and foot, to the " tender mercies of the wealthy capitalists" of Eng- 
land ; the men who-, while engaged in the work of " overwhelming 
all foreign competition," could afford to dispense with interest on 
their capital, their competitors meanwhile paying 10, 15, or 20 per 
cent, per annum for the use of the money required for carrying 
stocks constantly accumulating on their hands while engaged in the 
effort at maintaining the unequal contest. 

Further even than all this, the Government undertook to furnish 
to the foreign producer storage, and under such circumstances as 
rendered an iron certificate of deposit equally transferable with a 
money one ; whereas, the domestic producer was by law deprived 
of all modes of transfer not accompanied by an actual delivery of 
the property itself. The great iron consumer of the country had 
thus, after having pledged itself to the men who had built the fur- 
naces and rolling mills, opened the mines, and constructed the roads, 
to protect them in their efforts for the establishment of compe- 
tition for the sale of iron, entered into an alliance, offensive and 
defensive, with parties whose essential object was that of destroying 
all that competition, thereby increasing competition for the purchase 
of British iron. 

Such a course of policy could have but one result. One by one 
iron masters succumbed to the pressure. One by one the miners of 
coal found themselves obliged to abandon their works. Seeing ruin 
ahead they begged of Congress to give them such a sliding scale as 
should secure them $50 a ton for sound American iron, twice more 
useful than the worthless trash that was then being forced upon the 
markets at $40 by their British competitors. Trifling as was this 
request it was refused, although but four years before Mr. Calhoun 
had said, that if he could be assured that American iron masters 
could supply the market at $80 they should have any amount of 
protection they saw fit to ask. 

American production had now fallen to little more than one-half 
the amount at which it had stood on the day in which the British 
iron masters' tariff, that of 1846, had gone into practical effect. 



76 



Soon, however, came the influx of California gold, bringing with 
it a large demand for iron, to be supplied, to a great extent, by- 
foreigners, at whose instance that tariff had been made, and now 
arose a competition for the purchase of their products by which 
they largely profited, charging double price for all they furnished. 
In three years they sold in the American market a million of tons 
of iron in its various forms, and at prices that must have paid 
twenty times over for the losses "voluntarily incurred" in the years 
from 1848 to 1850. A hundred millions of dollars of American 
property had been thrown idle, even .where not destroyed, to enable 
foreign iron masters to tax our people, in increased prices alone, 
a sum little short of that amount. In the decade ending June, 
1857, there were imported into the country hundreds of millions of 
dollars' worth that would have been made at home but for the gross 
violation, at its outset, of pledges voluntarily given by the ruined 
and broken-down iron consumers of 1842. In that decade there had 
been forced upon the English market millions upon millions of dol- 
lars' worth of food that ought to have been consumed at home, each 
successive increase of export tending to lessen the prices of the great 
regulating market of the world, and thus reducing, to the extent of 
thousands of millions of dollars, the amount yielded to our farmers 
by their crops.* In this manner was 'built up the great foreign 
debt that paved the way for that terrific crisis of 1857, which re- 
sulted in the stoppage of merchants, the ruin of manufacturers, the 
closing of mills, furnaces, and mines, and the depletion of the Na- 
tional Treasury, and thus furnished new and more convincing proof 
that in the coal and iron of the country were to be found the pil- 
lars of our National Temple, and that when they are being 
torn away the destruction of the entire edifice is close at hand. 

To those two great interests the whole period from 1856 to 1860 — 
that which succeeded the first excitement consequent upon the dis- 

* Every additional bushel of wheat thrown on the British market tends 
to lower the prices there. Every reduction there is followed by a similar 
reduction here, as Liverpool prices regulate those of New York, which 
regulates Chicago. The reduction, therefore, is felt on the whole crop. It 
would be a very small allowance for the reduction of British prices conse- 
quent upon American supplies to put it at a shilling — 24 cents — per bushel. 
This upon 1250 millions of bushels would give a loss to American farmers 
of $300,000,000 a year. This is a large sum, and yet it is short of the 
truth. 



11 

covery of California gold — had been one of constantly recurring 
crises, ending in the rain of a large proportion of the people who 
had given time, mind, and means to their development. To the 
country at large it had given prostration so complete that, notwith- 
standing an increase of population to the extent of full two-fifths, 
the power of our people at its close to make demand for iron was 
scarcely greater than it had been when the British iron master's 
tariff of 1846 first became instinct with life and prepared to exert 
its power for mischief. What was its extent shall now be shown. 

Fifteen years before, the power of the Alliance between British free 
trade and slavery which was now seeking the perpetuation of the 
Colonial System, had exhibited itself in an attempt at Nullification. 
Ten years later it had presented itself in the form of an almost 
entire annihilation of our domestic commerce, and in bankruptcy so 
general that it included individuals and banks, State and Federal 
Governments. This time it exhibited itself in a deliberate attempt 
at destruction of the Union. Throughout the whole of the period 
that had then elapsed since Carolina had abandoned protection and 
readopted that system which looked to the confinement of our people 
to the raising of raw products for distant markets — the system of 
slavery and barbarism — Liverpool had been becoming daily more 
and more the centre round which revolved our whole societaiy 
system. The men of the West exchanged with those of the East, 
and those of the South with those of the North, through British 
traders — through those very men now who since have been devot- 
ing all their means and all their influence to the final achievement 
of the one great end they so long had had in view, the dissolution 
of the Union. The more they could destroy the domestic commerce 
the smaller must become the threads by means of which its several 
sections still continued to be held together. By shutting up the 
mines, furnaces, and mills of the North they compelled the South 
to look to them for iron, and the greater the dependence thus 
produced the higher was necessarily the cost of machinery, and 
the rate of interest, at the North, with constant increase in South- 
ern dependence on Britain for a market for its cotton. British free 
trade was thus but the necessary preparation for that movement of 
1860 which gave us a war in the course of which rebellion has had 
all the aid, material and moral, that British traders could give to it. 
Fomenters of discord during the whole period to which we have 
referred, they have now labored for its perpetuation. 



T8 

That war had, however, brought with it a remedy for our evils, 
for it had, by reason of the secession of Southern Senators, given 
to the people of the loyal States a power for self-protection of 
which they had been long denied. The necessity for a re-invigora- 
tion of the domestic commerce had now become so very evident 
that once more there was given to the men of capital a pledge that 
if they would apply their resources to the development of the great 
mineral resources of the country they should now be certainly pro- 
tected against the foreigners by whom American competition for the 
sale of iron has been so often and so almost thoroughly destroyed. 
Past experience was adverse to the acceptance of such a pledge, faith 
having been so often broken that confidence in the national honor 
had well nigh disappeared. Nevertheless, it was accepted, and 
forthwith commenced a forward movement the rapidity of which 
can find no parallel in the wh'ole history of national development 
here or elsewhere. But three years have now elapsed since the 
country first began to recover from the first great shock of civil 
war, and yet brief as has been the period we are already enabled to 
show — 

I. That the production of pig metal has now attained an amount 
exceeding 1,300,000 tons; and with so great a development of 
resources in regard to both fuel and ores that we are warranted in 
saying, that large as is that quantity, it can be thrice increased in 
the next four years : 

II. That there now exists machinery for the conversion of iron 
into bars, and into steel, fully capable of supplying the whole 
present demand, accompanied with a power of increase to an extent 
equal to any future demand that you, consumers of iron, can, by 
any possibility, make : 

III. That the value of the product of the mines, furnaces, and 
mills engaged in furnishing coal and iron now exceeds two hundred 
and fifty millions of dollars, nearly all of which is given to the 
payment of labor employed in the extraction of coal and ore, in 
the conversion of the two into the iron that you so greatly need, or 
in the extension of preparations for the supply of both : ■ 

IV. That by thus making demand for labor they are offering 
large bounties for the importation of men who come here to eat 
American food while mining coal or ore, building houses or ships, 
constructing machinery of transportation and manufacture by 
means of which value is given to land, or farms on which they 



n 

and their children may raise the food required by other immigrants 
who follow in their footsteps : 

V. That the market for food that, directly or indirectly, is thus 
annually made for the produce of the farm, by these two great 
branches of industry, is therefore greater in amount than was the 
total export thereof to Europe in the whole fourteen years from 
the commencement of vitality in the British Iron Masters' Tariff of 
1846 to the breaking out of the rebellion of which that tariff has 
proved to be the cause: 

VI. That, at the lowest estimate, the contributions to the in- 
ternal revenue, State and national, consequent upon the creation of 
this immense market for food and labor, and the increased value 
given to labor, land, and their products, must be taken at eighty 
millions of dollars ; and — 

VII. That, notwithstanding the heavy burthens that have been 
laid on this great industry, notwithstanding the extraordinary in- 
crease in the price of labor of all descriptions, and notwithstanding 
the reduction of the American producer to a level, so far as protec- 
tion goes, with his British competitor, the latter is even now so far 
undersold in our own market that American furnaces and rolling- 
mills supply the whole American demand. 

That our duty has been performed, and that all the pledges which 
may have been given for us have been redeemed, are facts of which 
we thus furnish evidence that cannot be questioned. Has that of 
the nation been performed ? Has it kept faith with us ? Has it 
redeemed the pledge of protection given at the time when, in the 
day of its distress, it invited us to devote our lives, and give our 
time, our mind, and our means towards the re-establishment of 
that competition with British iron masters for the sale of iron 
which, under the blighting influence of the British free trade tariffs 
of 1846 and 185*7, had so nearly disappeared? Let us inquire. 

In March, 1861, before the imposition of any internal tax, what- 
soever, the protection to be given to railroad bars was fixed at $12 
per ton, and it was then well understood to be the very least that 
could with propriety be accepted by the parties who were thus to 
be invited to engage in that important and expensive work. 

A year later, heavy taxes having been imposed on many articles 
used in manufactures generally, there was granted to all of them, 
with the single exception of railroad bars, an additional five per 
cent. On that one excepted commodity, which now makes demand 



80 



for nearly 500,000 tons of pig metal, the increase was limited to 
the exact amount of the direct tax, $1 50 per ton, no allowance 
having been made, as in other cases, for the taxes on coal, lime, 
or other materials, nor for many others, including that on incomes. 
We have here the first violation of the pledge given in 1861. 

At the last session of Congress, pig-iron was taxed $2 per ton, 
equivalent to nearly $3 on a ton of bars. The taxes on coal and 
other materials were largely increased. That on railroad iron itself 
was more than doubled. Others were imposed too numerous here 
to recapitulate — the general result being, that our various contribu- 
tions, consequent upon the existence of the war, have now been 
carried up to $10 per ton. Was the duty on foreign iron corre- 
spondingly increased ? Was the pledge given in 1861 now re- 
deemed ? On the contrary, such was the agitation on the part of 
many of you, gentlemen, consumers of iron, urged thereto by 
British emissaries, that the duty on foreign iron was reduced to 
exactly the point at which it had stood when domestic iron had 
been free from all such charges. Thus for the second time was 
the national faith violated, and this time on so grand a scale that 
we find ourselves now placed in a position, as compared with the 
foreigner, worse than was that we occupied under the ultra free 
trade tariff of 1857. Then, ice had some slight protection. Now, 
the foreigner", as we shall show, is protected against us. 

Before doing this we must, however, consider the present transient 
protection resulting from the fact that the cost of British iron, 
and the duties on it, must be paid in gold, the premium thereon 
being all that now remains to us as offset against a duplication, 
even where not a triplication, of the cost of labor and its products. 
No part of that, however, do we hold because of any exercise of 
power by Government, from which we yet hold the pledge given in 
1861, now waiting to be redeemed. So far the reverse of this is it, 
that time and again has its Finance Minister given his best efforts 
for the removal of the only protection thus left to us. Time and 
again has it listened to proposals for its removal coming from 
foreigners who see therein the only remaining bar to the flooding 
of our markets with the produce of foreign mines, mills, and 
furnaces. Time and again have there been, on the part of Congress, 
efforts at movement in that direction. Time and again have we 
been assured by leading Republican journals that with any increase 
in the prospect of peace there must be a growing tendency towards 



SI 



the breaking down of that only barrier which stands between the 
great fundamental industries of the country and utter ruin. The 
great iron consumer spares no effort for the accomplishment of that 
object, and therein all the lesser consumers unite with it heart and 
hand. Busily as the paper consumers are employed in striking 
from under their feet that great branch of manufacture which 
furnishes the foundation on which they stand, even more so are you, 
gentlemen, iron consumers, engaged in undermining the foundations 
on which now stand the paper-maker and the printer, the spinner 
and the weaver, the ship-owner and the railroad proprietor, the 
machinist and the architect, the city and the county revenues, the 
State and Federal Governments. All of these, large consumers of 
iron, are now anxiously awaiting the time when, to the already 
violated faith of the Union there shall be added that conversion 
into gold of the taxes that. have been so heaped up on us — graduated 
as they had been by a paper standard — which sfyall, when connected 
with public storage, place the foreign producer in the enviable posi- 
tion of being protected by the American Government against 
the American iron master. All of them seem to be of the belief 
that by thus annihilating American competition for the sale of iron 
and increasing American competition for the purchase of British 
iron their demands must be more cheaply supplied. All of them 
have forgotten the lesson taught by the repeated crises of the British 
free trade tariffs of 1816, 1833, 1846, and 1857. All of them, 
finally, seem to be of the opinion that when the foundation upon 
which now rests our whole social system shall have been removed, 
the edifice will yet remain unharmed. It is a sad delusion, but as 
it exists we find ourselves required to look it fully in the face and 
determine what it is that our duty to our country and to our- 
selves requires us to do in the state of things that has been pro- 
duced. 

With the restoration of peace there will arise a demand for labor 
throughout the South that must tend greatly to prevent any mate- 
rial decrease in its price throughout the North. Tobacco and 
cotton fields will thus become competitors with the furnaces, mills, 
factories, and other establishments now in existence, and these latter 
must for a considerable period of time be compelled to choose be- 
tween paying high wages, on the one hand, and closing their works 
on the other. The present rate of wages in the coal and iron trades 
is little less than treble that of England, and how little the latter 
6 



82 



can be expected to rise is shown by the facts, that the Scottish 
miners, at the close of a turn out, on which they expended all their 
means to the extent of $7,500,000, have recently been obliged to 
give in and return to work under the wages against which they had 
rebelled ; and, that the very latest Iron Trade Circular (Birming- 
ham) advises its readers, that "the present state of the iron trade 
in all parts of the country, both in North and South Staffordshire, 
South Wales, and the Cleveland districts, justifies, or rather we 
should say, forces their masters to call upon the men for a reduction 
of wages." Such being the case, it is clear that it is not in that 
direction we can look for any change by which we might hope to 
profit. Further even than this, British wages must rise so soon as 
the cl wealthy English capitalists" shall have had the way opened 
to them for crushing out American competition, and then immigra- 
tion must, as we feel assured, fall to a point lower than any it has 
touched since the terrific crisis of 1842. In that direction, then, we 
cannot look for help. 

Taxes must be maintained at the present standard should that 
continue practicable. Further, indeed, than this, they must, wherever 
possible, be increased, as the nominal amount of business declines 
with the decline of prices. Incomes will count far less in gold than 
they now do in paper. Sales will do the same, and the gold received, 
admitting the quantity of goods sold even to remain the same, will 
be one-half less than that now received in paper. The interest on 
the debt will remain undiminished. So, too, must it be with soldiers' 
and sailors' wages, and the salaries of officers, civil, military, and 
naval — all of tvhom will then be enabled to purchase twice the 
quantity of commodities they can now command. Looking at all 
these facts, it seems to us to be quite clear that to meet the demands 
of the Government it will be needed that, wherever possible, the 
taxes shall be raised. That they cannot be reduced is absolutely 
certain. 

Labor, for a time at least, remaining unchanged, and taxes con- 
tinuing to be collected on coal, oil, &c. &c, the cost of all the 
materials of iron must continue to be so high as to afford to the 
iron master only the choice between closing his works, on the one 
hand, and ruin on the other. Transportation, the charge for which 
has now been carried up to a point so terrific, will remain for a time 
unchanged. Railroad companies, having tasted the sweets of such 



S3 



high charges, will certainly try the experiment of breaking their 
customers before they abandon them. 

Interest must rise as bank loans decline in their amount. In all 
past crises it has been from three to six times higher than has been 
paid by " wealthy English capitalists" when they have been com- 
pelled to carry heavy stocks of iron. 

Taking all these things together we think it quite safe to say 
that, for the first year at least, the cost to the American iron master 
of producing and transporting a ton of bars will be greater by 
twenty dollars than will be that of a ton produced in England 
at the present low rate of wages. Against this there will be a 
difference of two dollars in the taxes. The protection of the 
" wealthy English capitalist" will be complete, but where then will 
stand those American rivals who have now so completely occupied 
the domestic market as to have greatly reduced English wages, 
and thus paved the way for immigration from the British soil 
of tens of thousands of her workers in coal and iron, whose services 
have so much been needed ? Once here, they and their children 
would forever be customers to the farmers of the Mississippi Yalley, 
Forced to remain where they are they will, as heretofore, eat the 
food of Russia or of Egypt. That they will not come under a 
system that protects the British capitalist against his American 
competitor is very certain. The importation of such machinery, 
capable of making engines, while reproducing themselves, of the 
past year, is worth more to the country than all the iron that has 
ever come to it from British furnaces since the unfortunate repeal, 
under Carolinian threats of secession, of the protective tariff of 
1828. 

Such being the existing state of facts, and such the prospects, we 
have now to determine what we ourselves should do. To attempt, 
under such circumstances, to maintain a competition for the sale of 
iron, could result only in a gradual depletion of every ironmaster in 
the country, and in the abandonment of his works after he should 
himself have been ruined. The day of high prices would then come 
round again, but there would exist no person to profit of it. By 
withdrawing at once, before the day of exhaustion had commenced, 
we should, on the contrary, retain ourselves in a position to resume 
work when the day should have arrived for giving a new pledge of 
the faith that has been so often, and, as we think, so discreditably 
violated. By adopting this latter course, we should retain the 



84 



power to aid in the re-establishment of that internal commerce upon 
which the country is now so entirely dependent for the power to 
maintain the Government. By pursuing the former, we should 
speedily place ourselves in a condition to require aid, instead of 
granting it. After full consideration, therefore, we have arrived at 
the conclusion that we should best perform our duty, both public 
and private, by withdrawing from competition with those "wealthy 
English capitalists'-' who are now so anxious to sell cheap iron, and 
who have always doubled their prices so soon as they had annihi- 
lated their American competitors. You will, therefore, please to 
receive this as a notice that from and after the first of March next 
our works will be closed, and you will be free to make such arrange- 
ments in regard to the supply of iron as best may suit your conve- 
nience. 

Should, in the mean time, any of you be disposed to commence 
the work of producing iron that is to pay nearly as much in taxes 
as the foreign product pays in the form of duties, you can, as we 
think, be supplied with any number of furnaces and mills at their 
actual cost, and in very many cases at less than cost. 

Yours, respectfully, A. B. 

C. D. 
E. F. 

Such, as it appears to me, is the course that duty requires of the 
ironmasters of the country to pursue. Past experience proves that 
there can be no reliance on the pledges given to them when the 
country needs their aid. 'Foreign emissaries haunt the halls of 
Congress, and their presence there is not alone tolerated, but actu- 
ally courted, by gentlemen who can see advantage in enabling a 
constituent to save a dollar or two upon a few thousand tons of 
iron, and who cannot see that the power to buy iron at any price 
has resulted from American competition for the purchase of the 
products of the farm, and for the sale of those yielded by the mine, 
the furnace, and the rolling-mill. It is time, therefore, that they 
should now abandon the. position they so long have occupied, that 
of supplicants for mercy, and, as the best mode of serving the 
country, maintaining its revenue, and thus enabling its Government 
to live, take at once the true ground that, in ceasing to grant pro- 
tection, the iron consumers have lost all claim upon tjieni for the 
performance of duties. 



85 



It may perhaps be charged that this would be combination. It 
would be so, and the time has come for it. The country has now 
to carry on a war with foreign capitalists and their agents, for the 
maintenance of its credit, for the perpetuation of the Union, and for 
the conversion of the Declaration of Independence into something 
more than a mere form of words, and it will be worsted if the honest 
people of the country do not combine for its support. By so doing, 
they will speedily be enabled to obtain from foreign nations indem- 
nity for the past and security for the future, for in that combina- 
tion they will be sure to find the way to outdo England without fight- 
ing her. 

To enable ourselves to succeed we need only that stability of 
action which shall give to the capitalists security against foreign 
agitation. But a few days since one of the largest importers of 
British iron expressed to one of my, friends a wish that Congress 
should take such decided action as would warrant him in turning 
his capital from the importation to the production of this most 
important commodity, the materials of which so much abound 
throughout the Union. Let it but do this and the day will then 
be close at hand when the annual production will count by mil- 
lions of tons, and when our farmers will be relieved of all necessity 
for crushing down, in the regulating market of the world, the 
prices of all their products. The annual saving thereby produced 
would be greater in its amount than the value of all the iron im- 
ported into the country since the Peace of Ghent. 

In my next I shall ask your attention to the Farmer's Question ; 
meanwhile, my dear sir, remaining, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, January 16, 1865. 



THE FARMER'S QUESTION. 



LETTER NINTH. 

Dear Sir : — 

In a former letter the money value of the products of our coal 
and iron mines, our furnaces and rolling-mills, was stated as being 
little less than two hundred and fifty millions. Following that iron 
through the foundries and machine shops we shall find that those 
industries are this day yielding to the nation commodities whose 
market value certainly exceeds four hundred millions ; and then 
following their proceeds we find that nearly the whole is distributed 
among the men who own the land and those who cultivate it. 
Hence it is, that whenever those two great industries prosper the 
farmer prospers ; and that when they suffer he too becomes a heavy 
sufferer. 

Are the facts so ? it may here be asked. Are their proceeds so 
applied ? Let us see. 

Of this vast sum a very large proportion is distributed among 
the men who mine our coal and ore — men who aid in transporting 
them — men who aid in converting the two into iron — men who 
puddle the iron and roll the bar — and other men who convert the 
bar into hoes, spades, axes, knives, and engines. What becomes 
of it then ? They buy food for their families and themselves, all 
of which comes from American farmers. They purchase clothing 
made of Western wool or Southern cotton, and converted by means 
of men and women who tend the spindle and the loom while eating 
the food of Iowa and Minnesota. They buy houses composed of 
bricks and lumber, the one made, and the other cut and brought to 
market, by men who eat the pork of Ohio and the corn of Indiana 
or of Illinois. They buy newspapers whose types and paper repre- 
sent the hams of Kentucky, the wheat of Pennsylvania, and the 
butter and cheese of New York, while its press represents the food 
consumed in workshops which, in the wonderful character of the 



87 



machines turned out, furnish to the world puch conclusive proof that 
were American farmers but true to themselves American inge- 
nuity would speedily relieve them from the necessity for employing 
themselves in raising food for distant markets, the proper work of 
the barbarian and the slave, and of them alone. 

A part of this vast sum goes, however, to the owners of land 
that yields coal, ore, or lime ; another, to those who own furnaces, 
in which the three are converted into iron, or shops in which 
iron is converted into machinery to be used by the farmer, the 
weaver, the locomotive builder, and the builder of ships ; and we 
may now inquire what becomes of them. These men have families, 
and those families likewise need food that comes from American 
farms ; clothing all of which, were our farmers true to themselves, 
would represent the products of American agriculture ; houses 
which represent the labors of brickmakers and bricklayers, lumber- 
men, carpenters, masons, workers in coal, and workers in iron, all 
of them men who help to make the great market in which ex- 
changes of food to the annual extent of thousands of millions of 
dollars are now made. The profits of some of the owners of the 
great works from which are now annually turned out so many 
millions of tons of coal, so many hundreds of thousands of tons of 
iron, and so many engines, are, however, as we know, greatly in 
excess of their expenditure. What becomes of the surplus ? A 
part of it is applied to the extension of their works, and thus is 
created demand for labor, enabling many to obtain food and cloth- 
ing who otherwise might be unemployed and therefore unable to 
purchase either. Another part goes to the making of railroads, 
thus creating a further demand for labor, and giving the farmer a 
purchaser for his pork and his corn while at the same time increas- 
ing his facilities for reaching the distant markets. Another part, 
perhaps, is lent to the Government, and thus aids it in paying the 
farmer for the food, the clothing, and the machinery required by 
our armies in the field. Thus, of the whole five hundred millions, 
large as is the sum, it may, as I believe, be safely assumed that more 
than ninety per cent., and perhaps even ninety-five, goes directly, 
or indirectly, to the payment of labor that is employed in clearing 
and cultivating the land. 

Turning now back to the period of the British free trade tariffs 
of 1846 and 1857, we see that hundreds of millions worth of 
foreign iron had been imported — part of it in the form of knives 



and razors, very much of it in that of mere pig metal, and hun- 
dreds of thousands of tons in that of rails to be laid on lands the 
larger part of which abounded in fuel and in ore waiting alone the 
application of labor to their extraction and conversion. Why was 
this ? Because the system of that day had been framed in obedience 
to orders issued by the men who since have been employed in build- 
ing pirate ships to be used in driving from the ocean the stars and 
stripes ; in fitting out other ships for running our blockade ; and 
generally in giving to the rebellion that aid, material and moral, by 
help of which a war that should have been finished in a year has 
been prolonged throughout a whole Presidential term, and at a cost 
of hundreds of lives and hundreds of millions of property that might 
otherwise have been saved. 

For the iron thus imported we have paid hundreds of millions 
of dollars. What became of them ? Did the people who mined 
the coal and the ore employed in making that iron eat American 
wheat ? Did they wear clothing composed of corn raised in Iowa 
and wool sheared in Ohio ? Did they occupy houses built with 
lumber representing the food of Michigan or Minnesota ? Did 
the workmen who built the houses they occupied consume potatoes 
raised in Maine, or cabbages raised in Pennsylvania ? For an 
answer to these questions I give you the following figures repre- 
senting the wheat, the wool, the flour, the pork, and the lumber 
exported — not alone to the country from which we had the iron, 
but to France, Belgium, and Great Britain, the countries which have 
deluged us with the . silks, the woollens, the cottons, and the iron 
by means of the purchase of which we have been involved in a 
foreign debt of $500,000,000 that now makes upon us, for the mere 
payment of interest, a demand to meet which requires not less than 
$30,000,000, a sum more than half the product of California. The 
years I have taken are the three which immediately preceded the 
breaking out of the great rebellion. The country had then for more 
than a decade enjoyed the blessings of that British free trade 
which, as we were assured in 1847, was destined, before the lapse 
of twenty years, to make a demand for American food whose annual 
amount would count by hundreds of millions of dollars. To what 
extent those predictions have been realized will be seen by the 
following figures :■ — 



89 





Total Export. 


To Great Britain, France 


1858. 




and Belgium. 




JrOrK • . , 


(5>0 C K O A AO 

. «t>z,b5^,492 


$360,000 


J. 11 nielli LUlll » » 


9 QCQ AQQ 


O 1 PO AAA 

2,163,000 


Lumber . „ 


i 9,4.0 ooo 


9i ^ aaa 


"Wheat . 


Q Ofil ooo 


a Aon Ann 


Wheat flour . 


1 Q ooo £84 


K AA£> AAA 

0,UUo,UUU 


Wool 




i nnn 

10,UUU 


looy. 






i OIK « • t 


a ok k *7 a a 
o,oo5, i4ib 


C/lf) AAA 

563,000 


AlllAltxH OUlli. • • 


1 QOQ -I AO 

• 1,0^0, lUo 


OOI AAA 

^81,000 


Tin mhpi' 




9A7 nnn 


Whpat 


9 P.4Q 1 Q9 


i An9 nnn 


Wli^nt flnnr 

> T llCtlt HULll • • 


1 4. ^qi 


1 i A7 nnn 


Wool 




1 9Q AAA 


1860. 






Pork 


2,852,942 


371,000 


Indian corn . 


. 3,259,039 


1,894,000 


Lumber 


. 1,240,425 


475,000 


Wheat . 


. 9,061,504 


6,389,000 


Wheat flour . 


. 19,328,880 


5,133,000 


Wool . 


211,861 


141,000 


Total 


. $95,463,989 


$32,367,000 


Annual average 


. 31,821,330 


10,789,000 



The annual average, as here is shown, of the demand for these im- 
portant commodities by the three great manufacturiDg countries 
of Europe, was less than $11,000,000, or little more than 16 cents 
per head of their total population. A single hundred thousand of 
their people attracted here by large demand for labor and liberal 
wages, would furnish a market for the various products of the land 
much greater in its amount. 

The great European market for food that had been promised to 
our farmers had, as we see, totally failed. Had the deficiency of 
demand thus produced been in any manner made up by immigration ? 
On the contrary, the number of foreigners coming here to sell their 
labor was less in those years, as has been shown in a former letter 
— less, too, by thirty per cent. — than it had been in the year in 
which the British iron master's tariff of 1846 first became endued 
with power for mischief. 

Under the free trade tariff of 1841-2 the markets furnished by 
the coal and iron industries of the country could but little have ex- 



90 



ceeded $50,000,000. Under the protective tariff act of 1842, that 
market thrice increased in size, having, in less than half a dozen 
years, grown to $150,000,000. In the same time immigration had 
also thrice increased, and as every immigrant became a consumer on 
the moment of his arrival, whereas one year at least must elapse 
before any one of them could make the slightest addition to the 
quantity of food produced, it followed that to the whole extent of 
their consumption of food, of wool, of cotton, of lumber, and of all 
other of the products of the land, they constituted an addition to 
the farmer's market. Admitting that their average power to earn 
wages amounted to but $150 a year, the addition amounted to 
$25,000,000. The movement had, however, then only just com- 
menced. The more iron made in 1846 the greater was the quantity 
required in ; and the more made in this latter year the greater 
would have been the quantity required in 1848, ? 49, and '50 ; and 
the greater the immigration of 184t the more would have been its 
tendency to increase in each and every of the succeeding years, had 
protection been maintained. Had it been so, our coal and iron in- 
dustries would this day amount to more than $1,000,000,000, making 
demand to nearly the whole of that vast amount for the fruits of 
the earth, while immigration would by this time have 'been giving 
us a million per annum of European workmen, consumers, from the 
moment of their arrival, of the products of American farms, and 
busily engaged in the work of further increasing by procreation the 
number of mouths requiring further supplies of food and wool. 

We were told, however, that iron masters were too rapidly grow- 
ing rich ; that the taxes imposed for their benefit on iron con- 
sumers were so great that they amounted to more than the whole 
price at which their finished products could be bought ; that the 
farmers were thus made mere " hewers of wood and drawers of 
water" for great monopolists ; that protection closed the markets 
of Europe against their "breadstuffs that we were essentially an 
agricultural people, and so likely to remain ; that we therefore 
needed free trade ; and that, for all these reasons, the protection 
should be abandoned. It was abandoned, and we have now the 
result in the facts, that we had given up a domestic market among 
the producers of coal, iron, copper, lead, and cloth, which then 
amounted to hundreds of millions, and would since then have 
arrived at thousands of millions, and had, at the close of the system 



91 



inaugurated in its stead, obtained in exchange a market which took 
from us of pork, corn, wheat, flour, wool, and lumber, less than 
$11,000,000 a year, or one-third of a dollar per head of our then 
population. Such had been the results obtained in 1860 by means 
of agitation on the part of those British agents by whom had 
been represented in 1846, in the Halls of the Capitol, those wealthy 
capitalists of England whose first desire was that food might be 
obtained more cheaply while iron should command a higher price. 

Did they obtain their end ? To obtain an answer to this question 
we may here compare the prices in the New York market at the 
commencement and the close of that period of the British free trade 
system which dates from December, 1846. As given in a table 
now before me, they are as follows : — 





1847. 


. 1: 


S58. 


1S59. 


I860. 


Wheat flour 


. 7 68 


4 


25 


5 


50 


5 


50 


Rye flour . 


. 5 06 


3 


40 


3 


75 


3 


50 


Corn meal . 


. 4 62 


3 


50 


3 


90 


3 


80 


Pork . 


. 14 93 


18 


35 


16 


35 


17 


75 


Mess Beef . 


. 12 00 


11 


50 


8 


25 


5 


25 


Butter 


25 




25 




22J 




18 



In the period intervening between the first and last of these 
dates, California and Australia had given to the world probably 
$800,000,000 in gold, and yet, instead of increasing as it should 
have done, the power of the farmer to obtain money in exchange for 
his products had largely diminished. 

The reason for this was to be found in the fact, that determining 
to go abroad to get his iron and his cloth he had destroyed his 
great market. To what extent this had been done you may, my 
dear sir, judge for yourself after referring to an extract from an 
Address of one of the Charitable Societies of New York, given in 
a former letter, but here reproduced because of its important bearing 
on the question now before us : — 

" Up to the present the Association has relieved 6,922 families, contain- 
ing 26,896 persons, many of icTiom are families of unemployed mechanics and 
widows with dependent children, who cannot subsist without aid. As the 
season advances the destitution will increase. Last winter it was thrice 
as great in January as in December, and did not reach its height until the 
close of February." 

This paper bears date more than a year previous to the great 
crisis of 1857. Subsequently thereto the state of things was very 



92 



far worse than that above described. Our public warehouses were 
filled with foreign merchandise, always ready to supply the material 
of auction sales. Our auctioneers, constantly at work, supplied 
wholesale and retail dealers, at prices fixed by themselves. Our 
shops were gorged so thoroughly with foreign food and labor in 
every form, from the coarsest woollens to the finest silks, as to leave 
no place for the domestic food and labor that sought a market. 
Such was the mode of " warfare," by means of which " the most 
wealthy capitalists" of Britain had been enabled to 11 overwhelm all 
^foreign competition in times of great depression, and thus to clear 
the way for the whole trade to step in, when prices revived, and to 
carry on a great business, before foreign capital could accumu- 
late to such an extent as to be able to establish a competition in 
prices with any chance of success." Such, my dear sir, was the 
sort of warfare, by means of which Ireland and India had been 
ruined, without the necessity for firing a gun, or drawing a sword. 
Such was the warfare against which your fellow-citizens, for ten 
years previously, had sought, but vainly sought, to be protected — 
the only answer to the petitions having been, that the duties of the 
government were limited to the task of protecting itself, leaving the 
people to protect themselves as best they could. 

As a consequence of this it was : that after a growth of pauper- 
ism steadily continued during all those years, it suddenly so much 
expanded that hundreds of thousands of our people were wholly 
unable to sell their labor, or to purchase food and clothing : 

The factories, mills, mines, and furnaces, the cost of which had 
counted by hundreds of millions of dollars, were then closed, and 
likely so to remain : 

That the power to diversify the employments of society was then 
declining from day to day : 

That, simultaneously therewith, we were adding to our population 
a million of persons annually : 

That the necessity for resorting to the labors of the field, as 
affording the only means of support, was steadily increasing : 

That the supply of food tended, therefore, to augment, as the 
domestic consumption declined : and 

That its price tended, therefore, steadily to fall, and was, at the 
outset of the war, likely to be lower than had ever yet been known. 

The production of iron had largely decreased, as under such 



93 



circumstances might readily be supposed. What, however, was its 
import ? Did the figures there presented furnish any evidence of 
increase of power on the part of the farmer to purchase hoes or 
ploughs, or on that of the miner to purchase engines ? Let us see. 

In the three years above referred to there was imported of iron 
and manufactures of iron, to the extent of $45,000,000, giving an 
annual average of $15,000,000, or less than fifty cents per head of 
our population. In the hope to secure some trifling reduction in 
its price our farmer had been* persuaded to throw away a market 
that then amounted to hundreds of millions, and that would, before 
1860, have reached thousands of millions, and now the whole 
amount taken from him of his chief products, by the three 
principal manufacturing nations of Europe, was barely sufficient to 
pay for the little iron that he could afford to purchase and the 
freight upon it ; that freight, too, paid chiefly for the use of British 
ships. As a necessary consequence, the country was running in 
debt from day to day more deeply, and the interest on that debt 
was even then absorbing more than half the gold yielded by 
California. Hence it had been that the prices of the farmer's 
products had fallen in price as the supplies of the precious metals 
had so rapidly increased. Busily engaged in selling skins at six- 
pence each, and taking pay therefor in tails at a shilling, he had 
been giving all his efforts at increasing the power of that great 
combination of "wealthy English capitalists/' the primary object 
of all whose operations had been that of depressing the prices of 
food and raising the price of iron — diminishing still further that 
of the skins and raising still higher that of the tails. 

The most useful to the British traders of all the British colonies 
is that one which embraces these United States. Content with the 
word "independence," Americans take no care to make themselves 
or their country independent. So far the reverse is it, indeed, that, 
while talking largely of the Monroe Doctrine, they permit their 
laws to be dictated to them by British agents, representing " wealthy 
capitalists," who now seek to perpetuate throughout this "Western 
Continent the system so well described in the following passage 
by one of their predecessors of the last century :— 

"Manufactures in our American colonies should be discouraged, 
prohibited." * * "We ought always to keep a watchful eye 
over our colonies, to restrain them from setting up any of the manic- 



94 



factures which are carried on in Great Britain; and any such 
attempts should be crushed in the beginning." * * "Our colo- 
nies are much in the same state as Ireland was in, when they began 
the woollen manufactory, and as their numbers increase, will fall 
upon manufactures for clothing themselves, if due care be not taken 
to find employment for them, in raising such productions as may 
enable them to furnish themselves with all the necessaries from us." 

* * "As they will have the providing rough materials to them- 
selves, so shall we have the manufacturing of them. If encourage- 
ment be given for raising hemp, flax, &c, doubtless they will soon 
begin to manufacture, if not prevented. Therefore, to stop the pro- 
gress of any such manufacture, it is proposed that no weaver have 
liberty to set up any looms, without first registering at an office, 
kept for that purpose." * * "That all slitting-mills, and 
engines for drawing wire or weaving stockings, be put down. 11 * * 
" That all negroes be prohibited from weaving either linen or 
woollen, or spinning or combing wool, or working at any manufac- 
ture of iron, further than making it into pig or bar iron. That 
they also be prohibited from manufacturing hats, stockings, or 
leather of any kind. This limitation will not abridge the planters 
of any liberty they now enjoy — on the contrary, it will then turn 
their industry to promoting and raising those rough materials." 

* * "If we examine into the circumstances of the inhabitants 
of our plantations, and our own, it will appear that not one-fourth 
of their product redounds to their own profit, for, out of all that 
comes here, they only carry back clothing and other accommoda- 
tions for their families, all of which is of the merchandise and 
manufacture of this kingdom." * * " All these advantages we 
receive by the plantations, besides the mortgages on the planters 1 
estates and the high interest they pay us, which is very consider- 
able. 11 — (Gee on Trade, London, 1750.) 

A century earlier the Germans had ridiculed the people of Eng- 
land as men who sold skins for sixpence and bought back the tails 
at a shilling. Protection had changed all this. It had brought the 
English artisan to take his place. by the side of the English farmer, 
and now the English trader desired to do by the American colonist 
what the German had previously done by him — giving his whole 
efforts to the work of compelling the sale to him of skins at six- 
pence and the purchase from him of tails at a shilling. Thus far 
they had, with us, most thoroughly succeeded, and had done so 
by help of the very farmers by means of whose plunder they had 
obtained the power which recently has been so much increased, and 
of the exercise of which we have now so much reason to complain. 

To that great error on the part of American farmers we have 



95 



been indebted for the present war. What are the facts bearing on 
their present condition and future prospects, that have been de- 
veloped in its course, and what the measures required for enabling 
us to outdo England without fighting her, and thus achieve an inde- 
pendence that shall be something more than a mere form of words, 
I propose to show in another letter, meanwhile remaining, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. S. Colfax. 
Philadelphia, January 20, 1865. 



THE FARMER'S QUESTION. 



LETTER TENTH. 

Dear Sir : — 

The period, 1858-60, embraced in the returns given in my last, 
was one of peace, and much of the food of the West yet continued 
to pass southward on its way to European markets. Wheat took 
the form of flour, and corn became pork, for the supply of men en- 
gaged in raising and forwarding cotton. The latter went abroad, 
there to be combined with Polish and Russian wheat, to be thence 
returned to the poor farmer of Wisconsin who was glad to obtain 
even a single yard of indifferent cotton cloth in pay for a bushel of 
corn that had been exchanged in the market of Manchester for fif- 
teen or twenty yards. He was thus giving whole skins for sixpence 
and taking his pay in tails at a shilling ; as a consequence of which 
he was always in debt, and always glad to borrow a little money, 
even when obliged to pay for the use of it at the extraordinary rates 
of 20, 30, 40, 50, and even, as I have understood, 60 per cent, per 
annum. Why was this ? Not certainly because of any absence 
of fertility in the soil, that of the Mississippi Yalley being equal in 
all natural powers to any other in the world. Not because, as in 
Europe, of' any necessity for paying rent to a greedy landlord, for 
he had already attained to the position so much coveted by the 
working class of Europe, that of landed proprietor. Why then was 
it ? Because he had, of his own motion, made himself the mere 
serf of the class whose operations were so well described in the pas- 
sage given at the close of my last ; of that class which desires that 
food may be cheap and cloth and iron clear ; of that one which 
seeks to compel all the farmers of the world to bring their products to 
a single diminutive market, there to sell what they have and to buy 
what they need ; of that one which talks of free trade while seeking 
to create for itself an absolute monopoly of machinery of conversion 
and exchange; of that one, in fine, which now stands indebted to him 



97 



and others like him for all the power which has, in the past four 
years, been used for the destruction of our commerce on the seas, 
for the maintenance of the rebellion, and for the annihilation of that 
Union upon whose prolonged existence is now dependent the whole 
future of the laboring classes not of America alone, but of the world 
at large. 

The war having closed the South against the products of the 
West, there arose a necessity for seeking a market somewhere in 
the East. Where, however, could they have even looked for it, had 
we continued to maintain that British free trade system under which 
we had been made so almost entirely dependent upon distant nations 
for supplies of cloth and iron ? Look as they might it could 
nowhere have been fouud. Happily, secession brought with it, and 
on the instant, a power on the part of the North which speedily ex- 
hibited itself in the re-adoption of that protective system by means 
of which the value of the products of our coal and iron mines, our 
furnaces and rolling mills, has been carried up to two hundred and 
fifty millions of dollars, making demand, in a thousand ways, for the 
fruits of the earth to little short of that vast amount. The effect 
of the creation of this great market exhibits itself in the Message 
of Governor Yates, of Illinois, just now delivered, the following 
extract from which is recommended to the careful consideration of 
the farmers of the country : — 

"As a State, notwithstanding the war, we have prospered beyond all 
former precedents. Notwithstanding nearly two hundred thousand of the 
most athletic and vigorous of our population have been withdrawn from the 
field of production, the area of land now under cultivation is greater than 
at any former period, and the census of 1865 will exhibit an astonishing 
increase in every department of material industry and advancement ; in 
a great increase of agricultural, manufacturing, and mechanical wealth ; 
in new and improved modes for production of every kind ; in the substitu- 
tion of machinery for the manual labor withdrawn by the war ; in the 
triumphs of invention ; in the wonderful increase of railroad enterprise ; 
in the universal activity of business, in all its branches ; in the rapid 
growth of our cities and villages ; in the bountiful harvests, and in an 
unexampled material prosperity, prevailing on every hand : while, at the 
same time, the educational institutions of the people have in no way de- 
clined. Our colleges and schools, of every class and grade, are in the most 
nourishing condition ; our benevolent institutions, State and private, are 
kept up and maintained ; and, in a word, our prosperity is as complete 
and ample as though no tread of armies or beat of drum had been heard 
in all our borders." 

7 



98 

It may be said, however, that the Government demand for food 
has had much to do with the change for the better that is here ex- 
hibited. Whence, however, has the National Treasury obtained the 
means by which it has been enabled to pay its troops and buy their 
food ? Whence have come the vast sums required for fitting out 
our present enormous fleets ? Whence have come those required for 
constructing roads in Illinois and other Western States ? Why is 
it that the people have been, in time of war, enabled to do so much 
when in the previous time of peace they could do so very little ? 
For an answer to all these questions, my dear sir, allow me to ask 
you to look to the following exhibit of the movements of the New 
York savings banks in the last seven years : — 



No. of Banks. Amt. of Deposits. No. of Depositors. 

Jan. 1, 1858 ... 54 $41,422,672 203,804 

1859 ... . 56 48,194,847 230,074 

1860 ... 64 58,178,160 273,697 

1861 ... 71 67,440,397 300,693 
" 1862 ... 74 64,083,119 300,511 

1863 ... 71 76,538,183 347,184 

" 1864 . . . 71 93,786,384 400,194 



We have here 400,000 little capitalists, the average of whose 
savings is but $235, giving us a total of little less than a hundred 
millions of dollars. Two of those banks are specially devoted to 
the care of the funds of immigrants, and the following figures ex- 
hibit the extent of their operations : — 



Eesources. No. of Depositors. 
Jan. 1, 1860 .... 2,442,048 10,360 
" 1861 .... 3,420,321 14,838 
" 1862 .... 3,471,777 14,365 
" 1863 .... 4,475,291 18,621 
" 1864 \ . . . 6,056,600 24,151 



Turning now to Massachusetts, we find the increase of deposits 
in the four years, 1860-63, to have been more than a third of the 
total amount deposited in all the long period that previously had 
elapsed. The actual increase was $17,503,000, of which no less 
than $12,150,000 took place in '62 and '63. The mere savings of 
two States, in two years, thus present us with an increase of capital 
exceeding $40,000,000, a sum that is one-half as great as that of 
the whole British capital that, twenty-five years since, had been 
applied to the building of the mills, workshops, and warehouses, 



99 



and to the creation of the machinery, required for the then gigantic 
cotton manufacture. 

When furnaces and factories are being increased in number labor 
is in demand, wages rise, immigration grows, and the power of accu- 
mulation increases; and hence it is, that with every step in that * 
direction we witness a manifestation of greater power for further 
progress. From '58 to '61, notwithstanding a large increase in the 
number of New York banks, and consequent wide extension of their 
field of operations, the increase of deposits was but $26,000,000. 
The first year of the war brought with it a shock that caused sus- 
pension of business, accompanied by great decline of wages, and the 
result, as we see, exhibited itself in a large diminution of deposits. 
The second year of war brought with it that revival of demand for 
labor which had always previously attended the re-establishment of 
protection, and with it came an increase of deposits amounting, in 
the two succeeding years, to little less than $30,000,000. That 
increase, too, was obtained without any extension of the field of 
operations, the number of banks in the last year having been actu- 
ally less than it had been two years before. 

With the increased demand for labor consequent upon the creation 
of a great domestic market for food the whole country has become 
one great savings' bank, as a consequence of which the State and 
Federal Governments have been enabled to collect thousands of 
millions where before they could scarcely obtain hundreds, the peo- 
ple meanwhile creating for themselves machinery of production and 
transportation to an extent greater than ever before had been created 
in the same period of time in any country of the world.* 

It may be said, however, that there has been a European demand 
for our provisions and our bread-stuffs, and such has certainly been 
the case. Just at the moment when the Southern demand ceased 
Providence was pleased, in mercy to us, to afflict the people beyond 
the Atlantic with two successive crops both of which were much 
below the average, and thus was created one of those unexpected 
demands for which, under the British free trade system, our far- 

* In 1857, there were in operation 26,210 miles of railroad. In 1861, 
31,800, giving an average increase of 1,120 miles per annnm. Last year 
there were 35,000, giving an annual increase of 1,067 per annum — that 
obtained, too, at a time when the demand for services in the mills, mines, 
and factories of the country, and in the field, had doubled, even where it 
had not trebled the price of labor. 



100 



mers are compelled so fervently and so frequently to pray, though 
knowing well that short crops abroad must bring famine, distress, 
and ruin to thousands and tens of thousands of men who, like them- 
selves, have wives and children to support. The momentary 
effect exhibits itself in the fact that in the three years ending June 
30, 1863, our exports of the principal articles of food were as 
follows : — 

1860-61 1861-62 1862-63 

Wheat . . $38,313,624 $42,573,295 $31,430,270 

Flour . . . 24,645,289 27,534,677 25,458,989 

Corn . . . 6,890,865 10,387,383 3,321,526 

Pork . . . 2,609,818 3,980,153 4,334,775 

Hams and bacon 4,729,297 10,004,521 15,775,570 



$77,188,893 $94,480,029 $80,321,130 

What, however, were the prices at which these commodities were 
given to the European world ? What was the great bonus that 
even then, in times of scarcity, was paid to American farmers in 
return for closing up in 1846 a market among our miners of coal 
and iron, lead and copper, that would before that day have amounted 
to thousands of millions of dollars ? Let us see. 

As given in the Reports of Commerce and Navigation, the export 
prices, reckoned for the first year in gold, and for the subsequent 
ones in paper, were as follows : — 





1860-61 


1861-62 


1862-63 


Wheat, per bushel 


. $1 22 


$1 29 


$1 33 


Flour, per barrel 


. 5 00 


5 70 


6 40 


Com, per bushel 


62 


55 


66 


Pork, per barrel 


. 17 00 


13 00 


13 00 


Hams, &c, per pound . 


/ u 10 




10i 



Deducting from these prices the heavy charges of transportation 
and converting the balance into gold it must be clearly seen that it 
is not in that direction we are to seek the cause of the improvement 
now observed in the condition of the agricultural population of 
Illinois and other loyal States. Where then shall it be sought ? 
In the direction of the production of commodities that do not bear 
transportation, and that are dependent for a market upon the 
domestic demand atone. Read over, my dear sir, the passage above 
given as descriptive of the condition of Illinois, and you will see 
that it indicates demand for commodities whose bulk, or whose de- 
licacy, forbids transportation. Potatoes and turnips, of which the 



101 



earth yields by hundreds of bushels to the acre, cannot be raised 
where the domestic market has no existence. When, however, the 
coal mine, the lead mine, or the iron ore mine, comes to be opened, 
the market is at once created, and it extends itself with every new 
furnace, every new factory, every new rolling mill, until at length 
the farmer everywhere obtains the power to determine for himself 
whether to raise thousands of bushels of potatoes, or hundreds of 
bushels of wheat ; and then it is that the Declaration of Independ- 
ence becomes to him something more than a mere form of words ; 
then it is that it becomes a reality and a blessing. 

That independence, however, is precisely what the "wealthy 
English capitalist" does not desire that he shall obtain. What he 
desires is, that the distant farmer shall have no market near 
him ; that he shall be compelled to limit himself to the produc- 
tion of commodities of which the earth yields little, and that can, 
therefore, go to that distant market in which Russian, Polish, 
German, Egyptian, and American food producers are to contend 
with each other as to which shall sell most cheaply — then again 
competing with each other for raising the prices of all the com- 
modities they need to purchase. In this manner it is that he buys 
skins at sixpence while selling tails at a shilling. By this it is 
that he is enabled to put into his own pocket three-fourths of the 
produce of the labor of those poor and distant serfs to whom occa- 
sionally, and as a great favor, he lends a little of his surplus profits 
to be applied to the making of new roads by means of which popu- 
lation may be more widely scattered, while he himself is thereby 
relieved from the danger of any increase in the competition for the 
purchase of wool, rags, or corn, or for the sale of cloth and iron, 
the commodities of which he is the owner. 

The market whose prices for food regulate those of all the world 
is that of Great Britain. Whatever raises prices there raises those 
of New York aud Boston, Chicago and St. Louis. How trivial 
was the quantity that in the first three years of the war was absorbed 
by that market, and how low were the prices obtained, have above 
been shown. Why were prices, at a time of real scarcity, so very 
low? Because we had so much to sell. Had only one-fourth of 
what we sent been retained at home for the consumption of men 
engaged in mining coal and ore and making iron, while another 
fourth had been retained for the supply of men, women, and children 
coming from abroad to work in our mines, our factories, and our 



102 



fields, we should have obtained almost as much for the remaining 
half as we did obtain for the tvhole. That, however, is not all. 
Had we sent but one-half the quantity, and had the difference of 
price thus produced been but a single shilling sterling per bushel, 
that difference would have been felt by every bushel of the whole 
thousand millions produced in the loyal States, giving to be divided 
among their producers an additional two hundred and fifty millions 
of dollars, and enabling them to buy more cloth and more iron, 
and thus to live better, while so improving their machinery of pro- 
duction as to give them greatly more to sell in succeeding years. 
Had it made, as it certainly would have done, a difference of 
eighteen pence a bushel, the difference to our farmers — leaving 
altogether out of view corresponding differences in the prices of 
all their other products — would have been little less than four 
hundred millions. That amount, at the least, is it that they have 
paid in each of the last three years, for having, during a long period 
of years, so repeatedly crushed out the cotton and woollen manu- 
factures, the coal, iron, and other important branches of industry; 
and in that way it has been that they have built up, at their own 
cost, "the large capitals" which have so systematically been used 
by our British friends as "the great instruments of warfare against 
the competing capital of other countries." They, themselves, make 
the whip whose lash they so severely feel. They, themselves, fashion 
the club by means of which they are struck down at the feet of their 
foreign masters. They, themselves, by tolerating among their Re- 
presentatives a perpetual agitation of the British free trade ques- 
tion, are now paving the way for a return to a state of colonial 
subjection greater than has existed at any period since the peace of 
1*783. 

For proof of this allow me now to request you to look at the 
consequences that must inevitably follow from the recent action of 
your House in regard to the paper manufacture. Under that 
action printing paper can no longer be made in this country, and 
we have now to choose between going abroad for $25,000,000 of 
paper, or dispensing with our usual supplies of journals and of 
books. 

Under the action of the last session we shall, whenever the price 
of gold falls, be obliged to go abroad for, as I believe, the whole of 
the iron now produced, and the whole of the coal now employed in 
making iron. Taking these two items together, and placing them 



103 



at a gold value of only $150,000,000, the question now arises as to 
how we are to pay for them ? Seeking an answer to this question 
we are led naturally to look to the state, in regard to prices and 
demand, of the great regulating market of the world, and, fortu- 
nately, one of the New York journals of the day furnishes, in an 
extract from a Liverpool letter, all the information that we need, 
as follows : — 

"The wheat market continues without a symptom of revival. If your 
supplies were to fall off Germany would at once begin to increase her con- 
signments to us. The possibility of a rally in our home prices is thus effec- 
tually prevented, and the year closes with the price of bread at a point lower 
than has been known within modem experience." 

Germany and America thus contending for the supply of a dimi- 
nutive market, prices are " lower than have been known within all 
modern experience," and the market presents no "symptom of re- 
vival." In this state of things it is, that we are arranging for 
drawing from Europe hundreds of millions of dollars worth of 
paper, coal, and iron, to be paid for by crowding on the British 
market all the flour and all the pork and beef now employed in 
fabricating the first, and in mining and converting the others ! 
Such being the tendency of all our present legislation, am I, my 
dear sir, much in error in asserting that, often as our farmers have 
been "brayed" in the British free trade "mortar" their "foolish- 
ness" has not yet "departed from them?" 

All that has thus far been done towards increasing our depend- 
ence on the diminutive British market constitutes, however, but one 
of the steps in that direction. The repeal of the paper duty has 
rendered necessary a movement towards the abolition of all duties 
affecting the materials required for the paper manufacture. Of 
these soda ash, of which our consumption is probably 40,000 tons, 
is one of the most important. Why have we not made it? Why 
do we not now make it? Why is it that the Iowa farmer has been 
using his corn as fuel when there were thousands and tens of thou- 
sands of European men who would gladly have come and eaten it 
while engaged in converting into soda ash the coal, the lime, 
and the salt that underlie so much of the land of the Mississippi 
Yalley ? Because the country gives to the capitalist no security 
that he shall not be crushed out of existence after having expended 
hundreds of thousands of dollars in the erection of works required 
for the conversion of raw materials into the commodity we so 



104 



greatly need ! In the absence of such security, and in the presence 
of agitation such as has now succeeded, so far as your House, my 
dear sir, is concerned, in crushing out one of the greatest and most 
fundamental of our industries, we shall be required to continue year 
after year to give to our masters, the "wealthy capitalists' 7 of Eng- 
land, corn in its natural state at a few cents per bushel, buying it 
then back again in the form of bleaching powders at pence per 
pound — thus giving the skin for sixpence, and repurchasing the 
tail for a shilling. 

It being required of us that we now abandon the protective 
system, and look once more to Europe for that great market which, 
as we were assured in .1847, was before this time to take from us 
" breadstuffs" to the annual amount of hundreds of millions, it may 
be well here to inquire what it is that that system has done for our 
farmers in the short period that has elapsed since the abdication of 
Southern masters gave to the North once more the power of self- 
protection. 

The total export from the port of New York, exclusive of specie, 
in the week ending January 24, is given by the Evening Post at 
$6,333,663. Of this there appears to have been of breadstuffs and 
provisions going to those European markets from which we are 
likely henceforth to be obliged to draw our paper and our iron, as 
follows : — 

Beef 500 tierces. 

Flour 110 barrels. 

Bacon . . . . . . . . 49,228 pounds. 

In the same week the exports from Boston amounted to $481,447, 
in which were included 151 tubs of butter for Liverpool. Of an 
export, from those two ports, of nearly seven millions, the whole 
amount of breadstuffs and provisions for Europe did not exceed 
$30,000, or less than one-half of one per cent. How the remainder 
of the vast sum was made up will be seen on an examination of the 
following list of exports to the Argentine Republic, which presents 
a very fair specimen of the whole, as given in the Shipping List: — • 



105 



Sewing Machines . 


cases 


142 


Drugs 


. pkgs. 185 


Hoop Skirts . 




21 


Glassware 


cases 81 


Furniture 




280 


Hardware 


. pkgs. 438 


Clocks 




182 


Petroleum 


. galls. 3,158 


Manufactured Tobacco 


. lbs. 


17,975 


Wax 


bbls. 10 


Oars 


. pes. 


500 


Naval Stores 


. pkgs. 20 


Oak 




235 


Hops 


. bales 38 


Varnish. 


bbls. 


26 


Woodenware . 


. pkgs. 126 


Spirits Tar . 


galls. 


50 


Pepper 


bags 496 


Shoe Pegs 


bbls. 


55 


Cloves 


. bales 100 


Nails . 


kegs 


306 


Lumber . 


. feet 470,896 


Perfumery . 


cases 


75 







These articles, my dear sir, are merely the food of the laborer in 
another and higher form ; and thus it is that, to the weekly extent of 
millions of dollars, our farmers are enabled, by means of a diversified 
industry, to relieve themselves from the necessity for forcing their 
products on the already glutted market of England. The total 
export of breadstuffs to Great Britain and Ireland, in the last five 
months, as given in a table now before me, has been as follows : — 

Flour . 59,998 barrels. 

Wheat . . . . . . . 1,305,183 bushels. 

Corn 56,933 bushels. 

To the Continent there have gone 2,669 barrels of flour, and 68,521 
bushels of wheat. Such is the great European market to which 
we are now advised to look for all our supplies of cloth, paper, and 
iron ! Such is the market in whose favor we are now required to 
sacrifice coal and iron industries whose total products, in their vari- 
ous forms, now exceed four hundred millions of dollars, nearly the 
whole of which vast sum goes, directly or indirectly, to the men 
who are employed in clearing the land or cultivating it ! 

Why, however, is it that so little food can be spared for Europe? 
Because the domestic market has already become so large that 
prices are above the exportation standard. Let us go ahead in 
the direction iti which for three years past we have been moving — 
let us give to the makers of paper and the smelters of iron ore that 
security without which they dare not enlarge their works or increase 
their number — and the day will not then be far distant when we 
shall be imjwrters of wheat, instead of exporters of it, making a 
market for all the products of Canada and enabling our own farmers 
and landholders to become rich and independent, instead of being, 
as in all time past they have been, the mere serfs of those "wealthy 



106 



capitalists" whose first wish is that food may become cheaper, and 
cloth and iron dearer. 

Forty years since, General Jackson asked of his countrymen the 
important question, " Where has the American farmer a market 
for his surplus products ?" In answer thereto he spoke as follows, 
and nothing more accurate was ever written : — 

"Except for cotton, he has neither a foreign nor a home market. 
Does not this clearly prove, when there is no market either at home 
or abroad, that there is too much labor employed in agriculture, 
and that the channels of labor should be multiplied? Common 
sense points out at once the remedy. Draw from agriculture the 
superabundant labor, employ it in mechanism and manufactures, 
thereby creating a home market for your breadstuff's, and distributing 
labor to a most profitable account, and benefits to the country will 
result. Take from agriculture in the United States six 

HUNDRED THOUSAND MEN, WOMEN, AND CHILDREN, AND YOU AT 
ONCE GIVE A HOME MARKET FOR MORE BREADSTUFFS THAN ALL 

Europe now furnishes us. In short, sir, we have been too long 
subject to the policy of the British merchants. It is time we should 
become a little more Americanized, and, instead of feeding the 
paupers and laborers of Europe, feed our own, or else in a short 
time, by continuing our present policy, we shall all be paupers our- 
selves." 

France and England have pursued the policy here recommended, 
and they are now the greatest exporters of food in the world, the 
annual amount, with each, counting by hundreds of millions of dol- 
lars. They, however, combine hundred-weights of food with pounds 
of wool, silk, and cotton, and thus enable the former readily to 
make its way throughout the outside world. We are now, in pro- 
portion to our numbers and resources, the smallest food exporters 
of the world, because we insist on sending the raw materials of 
cloth to be combined together in other and wiser countries. 

The policy recommended by General Jackson was that of the 
protective period from 1828 to 1834, at the close of which we paid 
off the last remnant of our national debt. It was that of the 
period from 1842 to 1847, which commenced with a scene of almost 
universal ruin, and closed with an exhibit of prosperity such as the 
world had never before seen. It is the policy by means of which 
our farmers are now relieved from all necessity for forcing their 
products on foreign markets, to be there taken, at prices to be fixed 
by themselves, by "wealthy capitalists," who pay for them in cloth 
and iron, at prices also fixed by themselves. 



107 



For a portion of this relief they have been indebted to the demand 
created by large bodies of men employed in carrying muskets, but 
this is so far from being opposed to the view above presented that it 
furnishes proof conclusive of its truth. Change those men into 
miners and puddlers, producers of silks and cottons, watches and 
locomotives, and their demands for the various products of the earth 
will be greater than now they are. As it is, the farmer profits only 
by an increase in the prices of what he has to sell. As it then 
would be, he would add thereto a decrease of price in regard to all 
that he required to purchase. The truth of the Jacksonian doctrine 
is, thus, thoroughly demonstrated by the facts now presented in the 
consumption of our fleets and armies. As human pursuits become 
diversified land acquires value and the farmer becomes rich and in- 
dependent. 

Who, now, are the men who have combined together for the 
destruction of the great paper, coal, -and iron industries, and for the 
reduction of the farmer to his former dependence on British mar- 
kets ? Let us see. They are — 

I. Railroad owners, who, in the last three years, have taxed the 
farmer to the utmost of their ability by increasing the charge for 
transportation : 

II. British agents who look to reduction in the price of food and 
augmentation in the price of iron for increase of their commissions: 

III. Secessionists at home and abroad, in and out of Congress — 
men who look to bankruptcy of the National Treasury as the most 
certain means of obtaining elevation for themselves. 

Against these should now be banded together — 

I. Every farmer who desires to see the tax of transportation 
diminished and the value of his land increased : 

II. Every laborer who desires to find himself in the condition of 
one of the owners of the land : 

III. Every landholder who sees in liberal reward of labor a 
stimulus to that immigration by means of which the number of pur- 
chasers of land must be increased : 

TV. Every man who sees that land increases rapidly in value as in- 
dustry becomes more and more diversified, while declining as rapidly 
when furnaces and mills are closed and diversification dies away : 

Y. Every holder of a Government note, or bond, who sees that 
it is the Internal Revenue alone to which he and others like himself 
must in future look for payment of their interest : 



108 



YI. Every lover of his country who sees that with every increase 
in the domestic commerce there is an increase in the number of the 
threads by means of which the Union is to be held together : 

YIL Every man who appreciates the fact that it is to that British 
free trade by means of which we have been compelled to look to a 
distant market as the one in which to make all our exchanges, that 
we have been indebted for the loss of property and of life that has 
resulted from the great rebellion ; and, 

YIII. Every man who feels as an American should feel in refer- • 
ence to the conduct, throughout the past four years, of that British 
people which teaches everywhere "free trade" as the most efficient 
means of securing a monopoly of the machinery of transportation 
and conversion for the world at large. 

If this nation is ever to become really independent; if it is ever 
to become Americanized; if it is ever to occupy that position in 
the world to which the vast amount of mineral wealth placed at its 
command so well entitles it; if it is ever to cease to be a mere puppet 
in the hands of foreign agents ; if it is ever to be placed in a posi- 
tion to perform the duties of its great mission to the poor and 
oppressed throughout the earth ; its people must learn that in the 
real and permanent interests of all the portions of society there is 
a perfect harmony, and that of all who should desire the establish- 
ment of that certain protection which shall authorize the capitalist 
to open mines, build furnaces, improve water-powers, and erect mills, 
there are none whose interests look so much in that direction as do 
those of the landowner and the farmer. All, however, are greatly 
interested ; all should learn to appreciate the advantages that must 
result from combination for relief from that foreign domination 
under which we have so long and so severely suffered ; and all 
should study the admirable lesson taught in the following fable by 
our old friend iEsop : — 

"An old man had many sons, who were often falling out with 
one another. When the father had exerted his authority, and used 
other means in order to reconcile them, and all to no purpose, at 
last he had recourse to this expedient : he ordered his sons to be 
called before him, and a short bundle of sticks to be brought; and 
then commanded them, one by one, to try if, with all their might 
and strength, they could any of them break it. They all tried, but 
to no purpose; for the sticks being closely and compactly bound up 
together, it was impossible for the force of man to do it. After 
-this, the father ordered the bundle to be untied, and gave a single 



109 



stick to each of his sons, at the same time bidding him try to break it ; 
which, when each did with all imaginable ease, the father addressed 
himself to them to this effect: '0 my sons, behold the power of 
unity! for if you, in like manner, would but keep yourselves strictly 
conjoined in the bonds of friendship, it would not be in the power 
of any mortal to hurt you ; but when once the ties of brotherly 
affection are dissolved, how soon do you fall to pieces, and are liable 
to be violated by every injurious hand that assaults you !"' 

The men of the North have shown their appreciation of this 
lesson by the determination they have manifested to maintain the 
tJnion of the States. Let the people of all those States show their 
appreciation of it by combining together for securing permanently 
to the farmer such a market for his products as shall free him wholly 
from the tyranny of the "wealthy capitalists" abroad; let them 
determine that American food shall go to the production of all the 
cloth, all the paper, and all the iron they need to use, and we shall 
then have discovered the true and certain mode of outdoing England 
without fighting her. 

In another letter I propose to examine the railroad question, 
remaining meanwhile, with great regard and respect, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 



Philadelphia, Jan. 30, 1865. 



THE RAILROAD QUESTION. 



LETTER ELEVENTH. 

Dear Sir : — 

The man who habitually retains himself in a position to be 
obliged to seek for purchasers of his labor or its products rarely 
fails to reap ruin as its result. He who, on the contrary, so places 
himself as to be enabled to compel purchasers to come to him, finds 
his power of accumulation increase with each succeeding year, and 
ends with colossal fortune. The first is that one in which the 
American people, guided by British agents, have always kept them- 
selves, and we have the result in a war that must have brought 
universal ruin had it not brought with it also emancipation from 
that British free trade policy whose effects are so well described by 
General Jackson in the admirable letter already given. The second 
is that in which the people of France, under a system of protection 
maintained with a persistence that has no parallel in history, have 
placed themselves. The whole world is compelled to go to them to 
buy, and they fix the prices at which they choose to sell. The world 
is compelled to go there to sell, and they are thus enabled to fix the 
prices at which they choose to purchase. The result exhibits itself 
in a most extraordinary increase in the value of lands and houses, 
the figures of which I have seen but cannot at the moment find. 
Well, however, do T recollect that they were of a character calcu- 
lated to excite astonishment even in one who had witnessed the 
effect on western lands of a steady flow of emigration from the 
East. 

The first has been governed by that class of men of which Mr. 
Secretary Walker is the type ; that class which proclaims that this 
is naturally " an agricultural country," and that we must seek 
abroad a market for our "breadstuff's and provisions" — thereby 
so limiting our people in their modes of employment as to make 
the country little more than a mere puppet in the hands of foreign 
traders. The other has been, in this respect at least, governed by 



Ill 



men of whom the great Colbert is the type — men who have clearly 
seen that national independence was to be achieved by means of 
bringing the consumer to take his place by the side of the producer, 
and thereby giving value to both land and labor. The results ex- 
hibit themselves in the fact that France now controls the move- 
ments of all Europe, while the people of this country, with natural 
advantages a thousandfold greater, and almost as large a popula- 
tion, now find themselves compelled to abandon the Monroe doctrine 
and fight for national existence — France, meanwhile, obtaining 
command of our immediate neighbor, Mexico. 

Shall we ever do better ? It may well be doubted. Often as our 
farmers, our merchants, and our transporters have been "brayed" 
in the British free trade " mortar," their " foolishuess" has not yet 
"departed from them;" and, judging from recent proceedings in 
Congress, it would seem that, sad as has been our experience, they 
are little likely even now to profit by it. Nothing, as it would 
seem, can open their eyes to a perception of the great fact, that in 
the real and permanent interests of the West and the East, the 
North and the South, as well as in those of the ship-owner, the rail- 
road proprietor, the miner, the iron-master, the land-owner, and the 
laborer, there is a perfect harmony, and that it is absolutely im- 
possible to injure any one of them without at the same time injuriously 
affecting all the rest. Blind to this are they all, and, as a conse- 
quence of this it is, that we find western land-holders and laborers 
combining with railroad managers for promoting the adoption of a 
policy that each and every one of them would bitterly denounce 
could he but be persuaded to pause a little in his course and study 
carefully what had been the effect in the past of measures similar 
to those whose adoption he now so earnestly advocates. 

Of all, there are none who have shown themselves so blind to 
their true interests as those same railroad managers. All experience 
teaches that roads are profitable in the ratio borne by way to through 
business, and unprofitable in. the ratio borne by through to way busi- 
ness. Why is it so ? Because with the growth of this latter they 
become independent ; whereas, with increase in the proportion borne 
by through business they become more and more dependent. In 
proof of this we may take the fact, that such has been the compe- 
tition for this latter that produce has, on many occasions, been 
forwarded from Chicago to New York more cheaply than from 
Buffalo, and more cheaply from this latter than from either Roches- 



i 



112 

ter or Syracuse. In this manner they first offer bounties on emigra- 
tion from the older States, and then find themselves compelled to 
enlarge their capital and extend their roads with a view to retain 
their business. Common sense might, as one would think, teach them 
that by aiding in the development of our great mineral resources 
they would be creating a local traffic that could be carried on at 
small cost and with great profit to themselves ; yet have they in- 
variably been found combining with British agents in opposition to 
such development, thereby imposing upon themselves a necessity for 
still further extension of their lines, with steady diminution in their 
power to pay their stockholders. 

Our railroad history covers a period of only five and thirty years, 
and it may now be not unprofitable to cast our eyes back over that 
period with a view to ascertain what are the lessons for the future 
that may be thence deduced. 

In 1832, the railroad interest insisted upon depriving our furnaces 
of the manufacture of railroad bars. In the ten succeeding years 
many roads were made, and all with British bars bought at the 
highest prices. As a consequence the cost of roads was great, and 
at the close of the free trade period in 1842 the railroad interest 
was in a state of almost universal ruin. Why was it so ? Because 
the road-makers had united with British traders in urging upon the 
country a policy whose effect had been that of making them yearly 
more and more dependent upon a through trade that could not be 
made to yield a profit. The domestic market for food had been 
greatly lessened, while that of Europe had failed to grow. 

The tariff of 1842 imposed a heavy duty on railroad bars, and 
then for the first time was their manufacture commenced on this 
side of the Atlantic. Iron generally being well protected the pro- 
duction rose in half a dozen years to 800,000 tons, and the con- 
sumption to 900,000. Labor being everywhere in demand, im- 
migration trebled in that brief period. Towns and villages increased 
in number and in size. The local traffic.therefore grew, and railroads 
became once more profitable to their proprietors. 

Taking no lesson from experience railroad and canal owners 
united in beating down protection, and giving us Mr. Walker's 
free trade tariff of 1846. How they profited of this may be judged 
from the following figures giving the receipts of some of the princi- 
pal works in the period from 1842 to 1849 : — 



113 





New York 


Bait, and Ohio 


Pennsylvania 


Total. 




canals. 


railroad. 


canals. 


1842, 


1,749,000 


426,000 


903,000 


3 078 000 


1844, 


2,446,000 


658,000 


1,164,000 


4,268,000 


1846, 


2,756,000 


881,000 


1,357,000 


4,994,000 


1847, 


3,635,000 


1,101,000 


1,587,000 


6,323,000 


1848, 


3,252,000 


1,231,000 


1,550,000 


6,033,000 


1849, 


3,266,000 


1,241,000 


1,580,000 


6,087,000 



Under protection the receipts more than doubled, as here is shown. 
As the British free trade system became more fully operative they 
declined, thus presenting a striking commentary on Mr. Walker's 
assertion, made but two years previously, that under a free trade 
system " our own country, with its pre-eminent advantages, would 
measure its annual trade in imports and exports by thousands of 
millions of dollars." 

At that moment, however, California had already begun to fur- 
nish to the world its golden treasures, thus making a market for 
labor under which immigration for several years rapidly increased. 
That period, however, terminated with 1854, and thenceforward 
railroad property, as a natural consequence of continued railroad 
agitation for the abolition of the duty on railroad iron, rapidly 
decreased in value, as is shown by the following figures : — 







1852-3. 


1855. 


Baltimore and Ohio . 


/ 


98 


56 


Boston and Worcester 




. 105 


87| 


New York and Erie 




85 


52 


Cleveland and Pittsburg . 




93 


70 


Michigan Southern 




. 118 


97 


Cincinnati and Dayton 




. 102 


85 


Pennsylvania Central 




93 


88 


Camden and Amboy . 




. 149 


128 


Boston and Maine 




. 102 


94 



From that date to the opening of the rebellion immigration de- 
clined ; internal development almost ceased ; and railroad property 
so much depreciated that the average value of the New York Cen- 
tral, Erie, Hudson River, Reading, Michigan Central, Michigan 
Southern, Rhode Island, Cleveland and Toledo, Illinois Central, 
and Galena and Ohio roads was only forty -two per cent. 

The war came, bringing with it protection to the farmer, accom- 
panied by an increase in the value of railroad property, as exhi- 
bited in the following figures giving the average prices of the several 
roads last above referred to : — 
8 



114 



January, 1855 1860 1862 1863 1864 

42 56 51 95 143 

Seeking now the cause of the vast change that is here exhibited 
we find it in the following passages from Reports just made by two 
important Western roads — the Southern Michigan and the Cleve- 
land and Pittsburg Railroad. 

From the first we learn that — 

" Although the decline on the through business is at the rate of 
$30,000 to $40,000 per month, so great has been the increase in 
local traffic that the aggregate earnings for January, 1865, show an 
increase of about $50,000 over the corresponding month last year. 
Although there has been no diminution in the number of employees, 
the aggregate number of miles run by passenger trains is now 5000 
per week less than it was before the issuing of the passport order. 
There is, therefore, a considerable saving in running expenses." 

And from the second that — 

" The great increase of freight upon the road has come in a very 
important degree from two articles of traffic which may be considered 
the staple of your road, naturally and legitimately belonging to it. 
These articles are coal and iron ore of Lake Superior. The coal 
interest was one of the principal agencies in planning and building 
this road, and those early projectors of the enterprise have always 
looked to the development of the coal mines on the line of the road 
as a sure and steady means\of remuneration. The coal trade has 
from the first held an important place among the various sources of 
revenue to your road. It has steadily increased with the progress 
of years, and as manufacturing has been more extensively under- 
taken, and as new demands for coal from regions before unsupplied 
have arisen, the transportation over your road has been greatly 
increased in amount." 

What is true of these two roads, is almost equally so of those of 
the country at large, the existing prosperity of the whole railroad 
interest having come as a natural consequence of great develop- 
ments of mineral wealth. Take, for instance, petroleum, of which 
to the extent of $46,000,000 was sent to market in the past year, 
and see, my dear sir, how large have already become its contribu- 
tions to railroad revenues. Look further, however, and see how 
enormous they must become when Ohio, Virginia, and other States 
shall have sunk their wells and erected their engines, and when refin- 
eries shall, at the place of production, fit it for cheap transportation 
to the remotest corners of Maine in the Northeast and Texas in the 
Southwest, Florida in the Southeast and Nevada in the Northwest; 



115 



and then endeavor to satisfy yourself to what extent it is that every 
road in the country is interested in the successful prosecution of the 
great work of development that has but now commenced. Take 
next the 13,000,000 tons of coal now mined, and follow them in 
their travels throughout the Union, paying toll directly to roads in 
the East and roads in the West, and indirectly to every one in the 
whole extent of the loyal States. Add now to them the 1,300,000 
tons of pig metal at present made, and follow them, in all their 
various forms of railroad- bars, stoves, pipes-, knives, and engines, 
and then determine to what extent they have contributed to give to 
the roads of the country their present value. 

Study next, I pray you, the perfect harmony of all these various 
interests, and satisfy yourself how shortsighted are the men who 
believe in national discords. What is it that has so suddenly given 
an almost fabulous value to the great oil region of the West? Is 
it not the almost immediate presence of the great machine-shops 
of Ohio, Indiana, Illinois, and Pennsylvania? What would be its 
value we're its owners obliged to seek in Birmingham for engines ? 
It would have none whatsoever. To whom, however, are we in- 
debted for those shops? Is it not to men who have sunk mines 
and built furnaces, others who have mined coal and ore, and still 
others who have converted raw material into pigs and pipes? 
That it is so, cannot be questioned. The harmony of all those 
interests is absolute and complete. 

Equally so is that which exists between the men who make and 
those who need to purchase the railroad bar. Many millions of 
dollars worth of oil go to market, there to be exchanged for sugar 
and coffee, cloth, iron, and the thousand other commodities needed 
for a population that is increasing in wealth and numbers, and at 
every stage of their progress they contribute towards railroad divi- 
dends. So, too, with the iron and the coal. I have now before me 
the accounts of a single iron establishment that paid last year, in 
railroad tolls, no less a sum than $200,000. Judging from this, 
at how many millions might we safely fix the contributions of coal 
and iron to the maintenance of the railroad interest? 

To enable us to form an accurate judgment of the amount of 
such contributions by the great fundamental industries, let us for 
a moment look to the effect that would at once result from 
their annihilation. Would it not certainly diminish by two-thirds 
the real value of every railroad in the Union? That it would 



116 



do so, cannot be questioned. What, then, would be the effect were 
we in the next seven years to double, even if we should not treble, 
the product of our mines, our furnaces, our rolling-mills, and our 
wells? Could it fail to be that of giving to all railroad property 
a fixed and certain value, even when estimated in gold, greater than 
it ever yet has known? That it could not fail to do so, is abso- 
lutely certain. That you may now be led, my dear sir, to arrive, in 
this respect, at the same belief with myself, I would ask you to look 
to the fact that a coal mine is a vast magazine of power; that thou- 
sands of tons of coal can be made to do the work of hundreds of 
thousands of men ; that in the extent and variety of metallic de- 
posits we are ahead of the whole of Europe combined; that power 
alone is needed for bringing to light the vast treasures of the iron 
mountains of Missouri on the west, and of the Adirondack on the 
east — of the great iron and copper beds of the shores of Lake Su- 
perior — of the wealth -abounding hills of Tennessee — of the great 
lead deposits of Illinois and Iowa — of the coal, iron, and gold 
abounding districts of Virginia — of the zinc and iron deposits of 
New Jersey — and of the granite hills of New England ; that the 
power at our command is equal to that of almost the whole earth 
combined ; that that now used in Great Britain alone is estimated 
as being equal to the labor of 600,000,000 of men ; that by a proper 
application of our energies we might within the next decade go far 
beyond even that vast amount ; that production increases almost 
geometrically as the power applied increases arithmetically ; that 
exchanges increase with the increase of production; that the power 
to contribute to the maintenance of roads increases with a rapidity 
far exceeding that of production ; and then determine for yourself 
how magnificent is the future that will open itself to the eye of 
every railroad manager when he and his fellow-proprietors shall 
have arrived at the conclusion, that there is a perfect harmony in 
the interests of the men who make iron and those who need to use 
it, and that an enlightened self-interest demands of them that they 
shall ask of Congress the establishment of such a revenue system as 
shall give to the capitalist that certainty in regard to the future 
which is needed for enabling us, before the lapse of another decade, 
to place ourselves side by side with Great Britain in the production 
of many of the most important metals, and before the close of 
another to leave her far behind, thus giving to the farmer a market 
near at hand for all his products. 



117 



The mind is lost in contemplation of the marvellous amount of 
wealth and power that has by a beneficent Creator been placed at 
our command. Still more, however, is it lost in wonder when 
studying the slow degrees by which we have arrived at the idea that 
prosperity among our people, freedom to the slave, and power and 
influence among the nations of the world, were to come to us only 
as a consequence of the application of that vast power to the de- 
velopment of that wonderful wealth. More than thirty years since, 
at the close of the protective period which began in 1828, our con- 
sumption of iron was 300,000 tons. Ten years later, at the close 
of a long and dreary free-trade period, with a population one-third 
greater, the consumption was still but little more. Five years 
later, at the close of the protective period of 1842, our production 
had already trebled, and so great had become the demand, that the 
import of foreign iron was nearly as great as it had been in 1842. 
Ten years still later, with a population again a third increased, and 
with all the advantage of California gold developments, our pro- 
duction, under the British free-trade system, had diminished, while 
our total consumption had scarcely at all increased. Of the four 
years that have since passed by, one was a period of universal pros- 
tration, and yet, in the three that have succeeded our consumption 
has been carried up to a point nearly one-third higher than that at 
which it stood at the outbreak of the great rebellion. These are 
remarkable facts, and with them is connected another series of 
phenomena of the highest importance to railroad proprietors, which, 
however, seems to have escaped their notice. Whenever the domes- 
tic production of iron has been advancing railroad property has 
paid good dividends, while dividends have always declined as 
furnaces and rolling-mills became idle and their proprietors 
became bankrupt. In 1832, the first of the protective periods 
above referred to, railroads had scarcely yet made their appearance 
on the stage, but transporters of every description were highly 
prosperous. In 1842, at the close of the first of the above-named 
free-trade periods, furnaces were closed and railroad companies were 
bankrupt. In 1847, the second protective period, ironmasters were 
prosperous and railroad companies paid good dividends. In 1854, 
under a temporary California excitement, railroad stocks were high 
and ironmasters were building rolling-mills. In 1860, at the close 
of the last free-trade period, railroad stocks were selling, as has 
been already shown, at an average of 42 per cent., and mills, mines, 



J18 



and furnaces were everywhere closed. To-day, after three years of 
protection, all is changed, ironmasters having doubled their pro- 
duction and thus enabled railroad stocks to go again to par. 

The direct connection between the road and iron interests is here 
so clearly obvious that it is almost marvellous that the former 
should so long have failed to see it. More wonderful is it, how- 
ever, that seeing what has but now occurred, they should yet con- 
tinue so blind to their true interests as to array themselves in oppo- 
sition to any measure on the part of Congress that shall tend to 
give that security for the future without which the capitalist will 
not give his time and his means to the opening of mines, or to the 
building of furnaces and mills. To induce him so to apply his 
powers he must have protection against that system so well described 
in an extract from a Parliamentary Report to which your attention 
has already more than once been called, and which, as I have said, 
should be read day by day, week by week, month by month, and 
year by year, by every man who desires to see the Union maintained, 
with constant increase in the power of the nation to command the 
respect of the other communities of the earth. It is as follows : — 

''The laboring classes generally, in the manufacturing districts of 
this country and especially in the iron and coal districts, are very 
little aware of the extent to which they are often indebted for their 
being employed at all to the immense losses which their employers 
voluntarily incur in bad times, in order to destroy foreign competi- 
tion, and to gain and keep possession of foreign markets. Au- 
thentic instances are well known of employers having in such times 
carried on their works at a loss amounting in the aggregate to 
three or four hundred thousand pounds in the course of three or 
four years. If the efforts of those who encourage the combinations 
to restrict the amount of labor and to produce strikes were to be 
successful for any length of time, the great accumulations of capital 
could no longer be made which enable a few of the most wealthy 
capitalists to overwhelm all foreign competition in times of great 
depression, and thus to clear the way for the whole trade to step 
in when prices revive, and to carry on a great business before foreign 
capital can again accumulate to such an extent as to be able to 
establish a competition in prices with any chance of success. The 
large capitalists of this country are the great instruments of warfare 
against the competing capital of foreign countries, and are the most 
essential instruments now remaining by which our manufacturing 
supremacy can be maintained; the other elements — cheap labor, 
abundance of raw material, means of communication, and skilled 
labor — being rapidly in process of being equalized." 



119 



The wealthy British ''capitalists" here described have their 
agents everywhere, and everywhere prepared for combination with 
every little private or local interest for the removal of grievances of 
which they know their masters and themselves to he the cause. 
What they desire, as they know full well, is that food may be cheap 
and iron high in price. What we desire, and what by means of 
protection we are seeking to obtain, is that the farmer may from 
year to year be enabled to obtain more spades and ploughs, and 
better means of transportation, in exchange for less and less of food. 
When, however, the farmer complains of the low price of corn, he 
finds the agent always at hand, Mephistophiles-like, to whisper in 
his ear that but for protection spades and ploughs would be cheaper, 
while food would command a higher price. When the railroad 
manager, seeks to buy iron, he points to the low price at which 
British iron might be purchased, wholly omitting to call the atten- 
tion of his hearer to the facts, that British iron is always cheap 
when American people build f urnaces, and when American rail- 
road companies make good dividends, and always dear when Ame- 
rican furnaces have been blotted out of existence, when their 
owners have been made bankrupt, and when Americam railroad 
stocks are of little worth. In proof of this, I now give you the 
following facts as they present themselves in the Reports on Com- 
merce and Navigation for the several years above referred to : — 

At the close of the protective period which commenced in 1828 
and terminated in 1833 — that one in which for the first time the 
iron manufacture made a great forward movement, and therefore 
the most prosperous one that the country had ever known, the 
price at which British bar iron, rails included, was shipped to this 
country, was forty dollars. 

Eight years later, in 1841, when our mechanics were seeking 
alms — when our farmers could find no market — when furnaces 
and mills were everywhere closed, and their owners everywhere 
ruined — when States were repudiating, and the National Treasury 
was wholly unable to meet its small engagements — the shipping 
price of British bars had been advanced to fifty dollars. 

Eight years later, in 1849, after protection had carried up our 
domestic product to 800,000 tons, and after the British free trade 
tariff of 1846 had once again placed our ironmasters under the 
heel of the " wealthy English capitalist," we find the latter ener- 
getically using that potent "instrument of warfare" by means of 



120 



which he " gains and keeps possession of foreign markets," and 
supplying bar iron at thirty dollars per ton. In what man- 
ner, however, was the railroad interest paying for a reduction 
like this, by means of which they were being enabled to save on 
their repairs a tenth or a twentieth of one per cent, on their re- 
spective capitals ? Seeking an answer to this question I find in the 
Merchant's Magazine a comparison of the prices in February, 1848 
and 1850, of thirteen important roads, by which it is shown that in 
that short period there had been a decline of more than thirty 
per cent.! This would seem to be paying somewhat dearly for the 
whistle of cheap iron ; and yet it is but trifling as compared with 
information contained in a paragraph which follows in which are 
given the names of numerous important roads, whose cost had been 
very many millions of dollars, but which " from prices quoted, and 
those merely nominal, seem to be of little or no value — not enough, 
nor one-fourth enough, to pay interest on the sums advanced for 
their creation." 

At the close of another term of similar length, say in 1857, we 
arrive at a scene of ruin more general than any that had been wit- 
nessed since the closing years of that British free trade period which 
terminated with the universal crash of '42. How very low were 
then railroad stocks has been already shown. What, however, was 
the price at which British ironmasters were willing, now that they 
had so effectually crushed out competition, to meet the demands 
of railroad managers ? Were they still willing to accept $30 per 
ton as the shipping price? Did they then manifest any "desire to 
help the friends who had so largely aided them in " gaining and 
keeping possession" of this American market ? Far from it ! The 
more that railroad stocks went down, as a consequence of failure 
of the domestic commerce, the more determined did the British 
masters of our American stockholders show themselves, Shylock- 
like, determined to exact "the pound of flesh." In this unhappy 
period the shipping price of bars was $48, and that of railroad iron 
$42, the average having been forty-pour dollars, or nearly fifty 
per cent, advance on the prices accepted in 1849, when our foreign 
lords and masters had been engaged in " overwhelming all foreign 
competition in times of great depression," and thus " clearing the 
way for the whole trade to step in when prices revived, and to 
carry on a great business before foreign capital could again accu- 



121 



mid ate so as to be able to establish a competition in prices with 
any chance of success. 17 

Twice thus, at intervals of eight years each, have we had low 
British prices and great American prosperity as a consequence of 
the adoption of a policy under which American competition for the 
sale of iron has largely grown. Twice, at similar interval?, have 
we had high British prices and universal American depression as a 
consequence of the re-adoption of that system under which we have 
been compelled to compete in a foreign market for the purchase of 
British iron. Twice, thus, have American railroad managers been 
"brayed" in the British free trade "mortar," and twice have Ame- 
rican transporters found prosperity by aid of those protective 
measures to which they have always shown themselves so much 
opposed. Their British free trade experience had been a somewhat 
sad one. Have they profited of it ? Let us see. 

Another eight year period has now passed by, and we reach the 
present year 1865, with railroad stocks selling for a thousand mil- 
lions of dollars that would not, at its commencement, have sold for 
five hundred millions. What has caused this wonderful change ? 
The re-creation, by means of a protective tariff, of a great internal 
commerce, and nothing else. Under that tariff mines have been 
opened, mills and furnaces have been built, demand has been created 
for labor and labor's products, commerce has grown, and road 
proprietors have participated with farmers in the advantages re- 
sulting from the creation of a great domestic market which are so 
well described in an extract from the recent message of Governor 
Yates, of Illinois, already given, but here reproduced because of its 
important bearing on the question now before us : — 

"As a State, notwithstanding the war, we have prospered beyond 
all former precedents. Notwithstanding nearly two hundred thou- 
sand of the most athletic and vigorous of our population have been 
withdrawn from the field of production, the area of land now under 
cultivation is greater than at any former period, and the census of 
1865 will exhibit an astonishing increase in every department of 
material industry and advancement; in a great increase of agricul- 
tural, manufacturing, and mechanical wealth ; in new and improved 
modes for production of every kind ; in the substitution of machinery 
for the manual labor withdrawn by the war ; in the triumphs of in- 
vention ; in the wonderful increase of railroad enterprise ; in the 
universal activity of business, in all its branches; in the rapid growth 
of our cities and villages ; in the bountiful harvests, and in an un- 
exampled material prosperity, prevailing on every hand ; while, at 



122 



the same time, the educational institutions of the people have in no 
way declined. Our colleges and schools, of every class and grade, 
are in the most flourishing condition ; our benevolent institutions, 
State and private, are kept up and maintained ; and, in a word, our 
prosperity is as complete and ample as though no tread of armies 
or beat of drum had been heard in all our borders." 

The picture here given is that of every loyal State of the Union, 
and yet it is but the beginning of the change that is to be accom- 
plished by means of the establishment of perfect commercial inde- 
pendence. Railroad proprietors have already profited of it to the 
extent of hundreds of millions of dollars, and they have yet to 
profit to the extent of many other hundreds of millions by the 
further opening of mines, the further building of mills, and the 
further development of the wonderful amount of mineral wealth 
placed by a kind Providence at our command, and waiting only the 
application of that power which now lies hidden beneath the soil 
of so many thousands of square miles of all these central States. 
So having profited in the past, and having in view so large a profit 
in the future, it might be supposed that they would now, at least, be 
content. Are they so ? Are they disposed to let well alone ! Has 
their " foolishness" at length departed from them ? Having been 
now so repeatedly "brayed" in the free trade " mortar," are they 
now at last awakened to a sense of the advantages that must in- 
evitably result to themselves from carrying up our production of iron 
from hundreds of thousands to millions of tons ? Do they see that, 
to enable the Union to hold together, we must establish such an in- 
ternal commerce as will permit of exchanges being made between 
its various parts freed from the intervention of British agents 
British ships, and British ports ? Are their eyes yet open to a per- 
ception of the fact that the country that makes the most iron is 
the one into whose hands must fall the direction of the commerce 
of the world? Have they, in any manner, profited by the sad ex- 
perience of the past ? To all these questions the reply must, un- 
happily, be a negative one. Like the Bourbons, they have learned 
nothing, and have forgotten none of their free trade prejudices, and 
it is much to be feared they never will, or can, do so. Despite all 
the lessons of the past they have now allied themselves with British 
agents for crushing out those great fundamental industries to which 
alone we can look for that success in the war in which we are now 
engaged without which railroad stocks and bonds, Government 



123 



bonds, and property of all descriptions must lose two-thirds of their 
present value. 

The men most active in the work of destruction are, strangely 
enough, precisely those whose real and permanent interests should 
lead them in the opposite direction — the representatives of trans- 
Mississippi roads. Of all our people they are those who should 
most desire to promote immigration, and yet they close their eyes 
to the fact that immigration grows with development of our mineral 
resources and declines as furnaces are blown out and rolling mills 
are closed. Of all, they should most desire that existing railroad 
property should be productive, yet do they close their eyes to the 
fact that such property has always declined in value as furnaces and 
mills were closed, and grown again as mills were once again opened, 
and as furnaces were built. Of all, they should most desire that a 
low price of foreign iron should operate as a check upon our iron- 
masters, yet do they close their eyes to the fact that such iron has 
always fallen in price as domestic competition has grown, and risen 
again as soon as they and others like them had succeeded in 
enabling the " wealthy English capitalists" to destroy that compe- 
tition. Of all, they are those who have suffered most and learned 
the least. 

It was under the protective tariff of 1828 that immigration first 
became a matter of much importance. Furnaces were then built, 
internal commerce grew rapidly, farmers became rich, transporters 
were well rewarded for their services, immigration trebled in its 
amount, and American competition compelled the British iron- 
masters to furnish iron at a moderate price. 

Eight years later all this was changed, the American makers of 
roads and of iron being both together ruined, labor being every- 
where in excess of the demand, and immigration remaining sta- 
tionary at a point but little higher than it had so promptly reached 
in 1834. 

Eight years still later we find that under protection the produc- 
tion of iron had trebled, thereby making such demand for labor as 
to have carried the number of immigrants up to little short of 
300,000. 

At the close of another period of similar length, passed under 
the free trade system, we find labor to have been in excess of demand 
while railroad owners were being ruined, and immigration to have 
so far declined as to have ceased to merit much consideration. 



/ 

124 



Again, in 1865, we have reached a period of some protection to 
the greatest of all the industries of the world. Labor is, therefore, 
in demand. Immigration grows, and with it the value of railroad 
stock, while British iron is very cheap. 

The close connection that here is shown to exist between immi- 
gration and protection, as well as between prosperity and a low 
price of British iron, ought surely to be sufficient to satisfy our 
trans-Mississippi friends of the absolute necessity that exists for 
giving to the great departments of industry that certain protection 
which is required for securing a rapid increase in the domestic com- 
petition for supplying the market with coal, paper, leather, and iron 
of all descriptions. They have land in abundance, and their mineral 
wealth is great beyond all calculation. What they need is power. 
To obtain that they must have men to mine their coal and their ore, 
to build engines, to clear their lands, and to make their roads. Men 
come always when we have protection. They fly from us always 
when we are subjected to the British free trade system. Can they 
not, then, see that all their real and permanent interests are in per- 
fect harmony with those of the older States ? Must they be once 
more "brayed" in the free trade "mortar" before they will come 
to understand these things ? 

So much for the past, and now, for a moment, let us look to the 
future. To all appearances it will be needed, within a very brief 
period, to relay all the southern roads, and there will be need for 
hundreds of thousands of tons of rails. Are we preparing for this? 
Are we now building furnaces and rolling mills ? We are not ! On 
the contrary, they are being closed, even the present taxes, as com- 
pared with the duties on that made abroad, being so oppressive that 
the work of manufacture can no longer be carried on with any 
profit. It is seen, too, that the nearer we approach a gold value 
the heavier become the internal taxes, and the more does the foreign 
manufacturer tend to become protected against the domestic one. 
Let this continue but a little longer, and let occasion arise for laying 
those Southern roads, and what then will be the price of British 
iron ? Cannot our railroad managers see that, in pursuing their 
present course, they are not only " killing the goose that lays the 
golden egg," but also providing for subjecting themselves to a taxa- 
tion for the benefit of our British friends that, combined with the 
loss of the domestic traffic, must cause the price of their stock to 
fall again to the low price at which it stood in 185 Y ? Cannot 



125 



they see that now, as always heretofore, they are playing cards that 
have been placed in their hands by men whose one great object in 
life is that of having food and labor cheap while iron is maintained 
at the highest price ? Can they not see that the objects they should 
always have in view are directly the reverse of this, their prosperity 
coming always with rise in the profits of the farmer and in the 
wages of the laborer, and decline in the price of iron ? They are 
now laboring to arrest the growing tendency to emigration from 
the shores of Europe; and yet, every man who can be attracted here 
becomes, from the moment of his arrival, a contributor to their 
revenues, while preparing, by means of procreation, for a further in- 
crease in the number of such contributors, and in the powers of each 
and all. 

It is surely time that our railroad managers should awaken to 
the fact that their interests are so perfectly in harmony with those 
of the men who mine coal and make iron that every blow levelled 
at the latter tells directly upon themselves. When they shall do 
so — when they shall have arrived at the conclusion that these two 
great interests should stand shoulder to shoulder with each other, 
and that an enlightened self-interest ought to prompt them to aid 
in securing the adoption of measures looking to the incorporation 
of home-grown food in every yard of cloth, every ream of paper, 
and every hide of leather consumed on this side of the Atlantic — we 
shall then at length be fairly on the road toward finding how it is 
that we may outdo England ivithout fighting her. 

Sincerely hoping that the day may not be far distant when all 
this shall be done, and when our people shall, to use the words of 
Jackson, become a little more Americanized, I remain, my dear 
sir, with great regard and respect, 

Yours very truly, 

HENRY C. CAREY, 

Hon. Schuyler Colfax. 

Philadelphia, February 10, 1865. 



I 



THE CURRENCY QUESTION. 



LETTER TWELFTH. 

Dear Sir: — 

Side by side with the question of protection, and equal with 
it in its importance, stands that of the Currency, to which I pro- 
pose now to ask your attention. 

Had it been possible, on the 4th of March, 1861, to take a 
bird's-eye view of the whole Union, the phenomena presenting 
themselves for examination would have been as follows : — 

Millions of men and women would have been seen who were 
wholly or partially unemployed, because of inability to find persons 
able and willing to pay for service. 

Hundreds of thousands of workmen, farmers, and shopkeepers 
would have been seen holding articles of various kinds for which 
no purchasers could be found. 

Tens of thousands of country traders would have been seen por- 
ing over their books seeking, but vainly seeking, to discover in 
what direction they might look for obtaining the means with which 
to discharge their city debts. 

Thousands of city traders would have been seen endeavoring to 
discover how they might obtain the means with which to pay their 
notes. 

Thousands of mills, factories, furnaces, and workshops large and 
small, would have been seen standing idle while surrounded by 
persons who desired to be employed ; and 

Tens of thousands of bank, factory, and railroad proprietors 
would have been seen despairing of obtaining dividends by means 
of which they might be enabled to go to market. 

High above all these would have been seen a National Treasury 
wholly empty, and to all appearance little likely ever again to be 
filled. 



12T 



Why was all this ? The laborer needing food, and the farmer 
clothing, why did they not exchange? Because of the absence 
of power on the part of the former to give to the latter auything 
with which he could purchase either hats or coats. 

The village shopkeeper desired to pay his city debts. Why did 
he not ? because the neighboring mill was standing idle while men 
and women, indebted to him, were wholly unemployed. 

The city trader could not meet his notes, because his village 
correspondents could not comply with their engagements. The 
doctor could not collect his bills. The landlord could not collect 
his rents; and all, from laborer to landlord, found themselves com- 
pelled to refrain from the purchase of those commodities to whose 
consumption the National Treasury had been used to look for the 
supplies upon which it thus far had depended. 

With all, the difficulty resulted from the one great fact already 
indicated in regard to the laborer. If he could have found any 
one willing to give him something that the farmer would accept 
from him in exchange for food — that the farmer could then pass 
to his neighbor shopkeeper in exchange for cloth — that that 
neighbor could then pass to the city trader in satisfaction of his 
debt — and that this latter could then pass to the bank, to his 
counsel, his physician, or his landlord — the societary circulation 
would at once have been re-established and the public health re- 
stored. 

That one thing, however, was scarcely anywhere to be found. 
Its generic name was money, but the various species were known 
as gold, silver, copper, and circulating notes. Some few persons 
possessed them in larger or smaller quantities ; but, the total 
amount being very small when compared with that which was re- 
quired, their owners would not part with the use of them except 
on terms so onerous as to be ruinous to the borrowers. As a 
consequence of this, the city trader paid ten, twelve, and fifteen 
per cent, per annum for the use of what he needed, charging 
twice that, to the village shopkeeper, in the prices of his goods. 
The latter, of course, found it necessary to do the same by his 
neighbors, charging nearly cent, per cent. ; and thus was the whole 
burthen resulting from deficiency in the supply of a medium of ex- 
change thrown upon the class which least could bear it, the work- 
ing people of the country — farmers, mechanics, aud laborers. As 
a consequence of this they shrunk in their proportions as the 



128 



societary circulation became more and more impeded, while with 
those who held in their hands the regulation of the money supply 
the effect exhibited itself in the erection of those great palaces 
which now stand almost side by side with tenement houses whose 
occupants, men, women, and children, count by hundreds. The 
rich thus grew richer as the poor grew poorer. 

Why was all this? Why did they not use the gold of which 
California had already sent us so many hundreds of millions ? 
Because we had most carefully followed in the train of British 
free trade teachers who had assured our people that the safe, true, 
and certain road towards wealth and power was to be found in the 
direction of sending wheat, flour, corn, pork, and wool to England 
in their rudest form, and then buying them back again, at quadruple 
prices, paying the difference in the products of Californian mines! 
Because we had in this manner, for a long period of years, been 
selling whole skins for sixpence and buying back tails for a shilling; ! 
Because we had thus compelled our people to remain idle while 
consuming food and clothing, the gold meanwhile being sent to 
purchase other food and clothing for the workmen of London and 
Paris, Lyons, Manchester, and Birmingham ! 

Why, however, when circulating notes could so easily be made, 
did not the banks supply them, when all around them would so 
gladly have allowed interest for their use ? Because those notes 
were redeemable in a commodity of which, although California 
gave us much, we could no longer retain even the slightest portion, 
the quantity required abroad for payment of heavy interest, and 
for the purchase of foreign food in the forms of cloth and iron, 
having now become fully equal to the annual supply, and being at 
times even in excess of it. That demand, too, was liable at any 
moment to be increased by the sale in our markets of certificates 
of debt then held abroad to the extent of hundreds of millions, 
the proceeds being claimed in gold, and thus causing ruin to the 
banks. To be out of debt is to be out of danger, but to be in 
debt abroad to the extent of hundreds of millions is to be always 
in danger of both public and private bankruptcy. The control of 
our ivhole domestic commerce was therefore entirely in the hands of 
foreigners who were from hour to hour becoming richer by means of 
compelling us to remain so dependent upon them that they could 
always fix the prices at which they would buy the shins, and those 
at which they would be willing to sell the 'tails. As a necessary con- 



129 



sequence of this, the nation was not only paralyzed, but in danger 
of almost immediate death. 

Such having been the state of things on the day of Mr. Lincoln's 
inauguration, let us now look at the remedy that was then required. 
Let us, for a moment, suppose the existence of an individual with 
wealth so great that all who knew him might have entire confi- 
dence in the performance of what he promised. Let us then sup- 
pose that he should have said to the laborers of the country, " Go 
into the mills, and I will see that your wages are paid ;" to the 
millers, " Employ these people, and I will see that your cloth is 
sold ;" to the farmers, " Give your food to the laborer and your 
wool to the millers, and I will see that your bills are at once dis- 
charged;" to the shopkeepers, "Give your coffee and your sugar to 
the farmer, and I will see that payment shall forthwith be made 
to the city traders, " Fill the orders of the village shopkeeper and 
send your bills to me for payment ;" to the landlords, " Lease your 
houses and look to me for the rents;" to all, "I have opened a 
clearing house for the whole country, and have done so with a view 
to enable every man to find on the instant a cash demand for his 
labor and its products, and my whole fortune has been pledged for 
the performance of my engagements ;" and then let us examine 
into the effects. At once the societary circulation would have been 
restored. Labor would have come into demand, thus doubling at 
once the productive power of the country. Food would have been 
demanded, and the farmer would have been enabled to improve his 
machinery of cultivation. Cloth would have been sold, and the 
spinner would have added to the number of his spindles. Coal 
and iron would have found increased demand, and mines and 
furnaces would have grown in numbers and in size. Houses be- 
coming more productive, new ones would have been built. The 
paralysis would have passed away, life, activity, and energy having 
taken its place, all these wonderful effects having resulted from 
the simple pledge of the one sufficient man that he would see the 
contracts carried out. He had pledged his credit and nothing 
more. 

What is here supposed to have been done is almost precisely 
what has been done by Mr. Lincoln and his Administration, the 
only difference being, that while in the one case the farmers and 
laborers had been required to report themselves to the single indi- 
vidual or his agents, the Government has, by the actual purchase 
9 



130 



of labor and its products, and the grant of its pledges in a variety 
af shapes and forms, enabled each and every man in the country 
to arrange his business in the manner that to himself has seemed 
most advantageous. To the laborer it has said, We need your 
services, and in return will give you that which will enable your 
family to purchase food and clothing. To the farmer it has said, 
We need food, and will give you that by means of which you can 
pay the shopkeeper. To the manufacturer it has said, We need 
cloth, and will give you that which will enable you to settle with 
the workman and the farmer. To the naval constructor it has said, 
We need your ships, and will give you that which will enable you 
to purchase timber, iron, and engines. In this manner it is that 
domestic commerce has been stimulated into life, the result exhibit- 
ing itself in the facts, that while we have in the last three years 
increased to an extent never known before the number of our 
houses and ships, our mills, mines, and furnaces, our supplies of 
food, cloth, and iron; and while we have diversified our industry 
to an extent that is absolutely marvellous ; we have been enabled 
to lend, or pay, to the Government thousands of millions of dollars, 
where before, under the system which made us wholly dependent on 
the mercy of the "most wealthy capitalists" of England, we found 
it difficult to furnish even tens of millions. The whole history of 
the world presents no case of a financial success so perfect. 

In the physical body health is always the accompaniment of 
rapid circulation, disease that of a languid one. Now, for the 
first time since the settlement of these colonies, have we had expe- 
rience of the first. Every man who has desired to work, has found 
a purchaser for his labor. Every man who has had labor's pro- 
ducts to sell, has found a ready market. Every man who has had 
a house to rent, has found a tenant. And why ? Because the 
Government had done for the whole nation what Companies do for 
localities when they give them railroads in place of wagon roads. 
It had so facilitated exchange between consumers and producers, 
that both parties had been enabled to pay on the instant for all 
they had had need to purchase. 

Important, however, as is all this, it is but a part of the great 
work that has been accomplished. With every stage of progress 
there has been a diminution in the general rate of interest, with 
constaut tendency towards equality in the rate paid by the farmers 
of the East and the West, by the owner of the little workshop 



131 



and by him who owns the gigantic mill. For the first time in our 
history the real workingmen — the laborer, the mechanic, and the 
little village shopkeeper — have been enabled to command the use 
of the machinery of circulation at a moderate rate of interest. 
For the first time have nearly all been enabled to make their pur- 
chases cash in hand, and to select from among all the dealers those 
who would supply them cheapest. For the first time has this class 
known anything approaching to real independence ; and therefore 
has it been that, notwithstanding the demands of the war, capital 
has so rapidly accumulated. The gain to the working people of 
the Union thus effected, has been more than the whole money cost 
of the war, and therefore has it been that all have been able to 
pay taxes, while so many have been enabled to purchase the 
securities offered by the Government. 

Further than all this, we have for the first time acquired some- 
thing approaching to a national independence. In all time past, 
the price of money having been wholly dependent on the price in 
England, the most important intelligence from beyond the Atlantic 
was that which was to be fouud in the price of British securities 
on the Exchange of London. With each arrival, therefore, we 
were, to our great enlightenment, and that too by means of flaming 
capitals, informed that Consols had risen or had fallen, our railroad 
shares then going up or down because the Bank of England had 
seen fit to purchase a few Exchequer bills, or had found it neces- 
sary to part with some of those it previously had held. In all 
this there has been a change so complete that the price of British 
Consols has ceased entirely to enter into American calculations. 
The stride, in this respect alone, that has been made in the direc- 
tion of independence, is worth to the country more than the whole 
money cost of the great war in which we are now engaged. 

The time had come to make it, the course of Britain having 
recently been in a direction that limits the circulation and insures 
a rise in the rate of interest. The Bank of England is limited to 
£14,000,000 as the amount of notes that may be issued in excess 
of the gold actually in its vaults. All other banks being limited 
to the amount that existed on a certain day in 1844, and some of 
them having since that time gone out of existence, the result 
exhibits itself in the fact that the total machinery of circulation 
supplied by the banks is less now than it was twenty years since. 
As a consequence of this, and in despite of the extraordinary 



132 



influx of gold from California and Australia, the rate of interest 
charged for the use of such machinery has been for some years 
past higher than that paid in any of our Atlantic cities, the fluc- 
tuations in regard to paper of the highest character having been 
between six and ten per cent. By the last accounts it had fallen 
to 5J, and that is now, as English journalists advise us, as much 
to be regarded as the normal price of money as was 4 per cent, 
before the discovery of California mines. The danger of depend- 
ence upon the British money market, always great, has now been 
much increased ; and it must become greater with every year, so 
long as British banking operations shall continue to be governed 
by that wonderfully absurd system for which the British people 
stand to-day indebted to the financial ignorance of Sir Robert Peel. 

Great and obvious as have been the benefits derived by the 
country from the system inaugurated under the administration of 
Mr. Lincoln, they are, as we are assured, counterbalanced by their 
tendency to produce inflation, and thus to increase the price of 
gold. How little truth there is in this, I propose to show in 
another letter, and meanwhile remain, my dear sir, 

Yery truly and respectfully yours, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, Feb. 13, 3865. 



\ 



THE CURRENCY QUESTION. 



LETTER THIRTEENTH. 

Dear Sir : — 

That the currency has been, and is, inflated, is beyond a 
question. Whence, however, has come the inflation ? What has 
caused the existence of disease ? Such are the questions to which 
an answer must be obtained before we undertake to prescribe the 
remedy to be adopted. Failing to do this, we shall certainly kill 
the patient. 

By all the currency doctors, both here and abroad, the cause of 
financial crises is found in the circulation ; and hence it has been 
that both here and elsewhere the world has been furnished with so 
many laws in regard to it, none of which would ever have existed 
had the matter been properly understood. To that question it 
was that Sir Robert Peel addressed himself when he framed a law 
that has already twice broken down, and that must continue to 
break down on each successive recurrence of the state of things it 
was intended to prevent. The statute-books of nearly all of our 
States present to view similar laws, all of which have proved as 
utterly worthless, and some of them almost as injurious, as that 
British one above referred to. 

The circulation needs no regulation, and for the simple reason 
that the people regulate it for themselves. For proof of this, 
look, 1 pray you, to the fact that the Treasury has been for 
several years past engaged in trying to obtain for small notes a 
circulation amounting to fifty millions, and yet has- not, at this 
hour, one of even the half of that amount. Why has it not ? 
Because the people need no more than twenty or twenty-five mil- 
lions. If they did need more, they would gladly take it. When 
Congress had before it a bill authorizing the emission of that 



134 



description of currency, it would have been deemed rank heresy 
to say that no limitation was needed, yet has experience proved 
that such was certainly the case. Had they omitted all restriction 
on the " greenbacks," they might perhaps have found, as in the 
case of the smaller notes, that the people understood better what 
they needed than did their legislators. That they would have done 
so, I regard as beyond a question. 

It is constantly assumed that it is the banks that determine how 
many notes shall be in use, and yet the experience of each and 
every individual in the community proves that exactly the reverse 
of this is true. That you, my dear sir, may satisfy yourself of 
this, I pray you to look for a moment to your own constant action 
in regard to the question now before us. On a given day you 
receive a quantity of bank-notes, which are then in circulation. 
What do you then do with them ? You place them in a bank, 
and thus put them out of circulation. On the following day you 
perhaps take them from the bank and pay them out, thus putting 
them again in circulation. What control did the bank exercise 
over these several operations ? None whatsoever. It is you, your 
friends, neighbors, and fellow-citizens generally, that regulate the 
circulation, and it is just as wise to pass laws limiting its amount 
as it would be to pass other laws determining the quantity of coal, 
iron, sugar, or coffee to be provided for their use. 

To this it is due that in communities that are really independent 
the circulation is so very nearly a constant quantity. That of the 
Bank of England, in the eventful period from 1832 to 1841, 
averaged £18,000,000, and although it embraced the time of one 
of the greatest excitements and one of the most fearful reverses 
ever known in that country, the circulation never went beyond 
that average to the extent of five per cent., nor fell below it to 
that of eight per cent. The differences exhibited are less even 
than might be reasonably looked for by any one familiar with the 
fact that during several of the years every workingman had been 
fully employed, while in several others a large portion of the 
manufacturing population was either idle or but half employed. 

Take now the following figures representing, in millions, the 
circulation of the New York banks, and see how uniform was its 
amount until the withdrawal in 1857, by the banks, of many mil- 
lions of loans that had been based upon deposits, had almost anni- 



135 

hilated the commerce of the country, and thus deprived our people 
of the power to make use of notes. 

1855 ... 41 1859 ... 36 1862 ... 42 

1856 ... 41 1860 ... 38 1863 ... 42 
1057 ... 41 1861 ... 36 1864 ... 40 
1858 ... .35 

In every case, as here presented, reduction had been a conse- 
quence of stoppage of the societary circulation, and not a cause 
of it. 

We are told, however, of the depreciation of Continental money, 
French assignats, and Confederate notes, and are threatened that 
we shall here experience the same result ; but those who present 
such views can scarcely properly appreciate the difference between 
the conditions under which such paper was emitted and those in 
which we stand. The first was issued by a Confederation that was 
little better than a rope of sand, and that had no certain power to 
provide for the ultimate payment of either principal or interest of 
any debt it might contract. The second were at first receivable 
only in payment for confiscated property, and were of no value for 
any other purpose. As the country became more and more "a 
scene of rude commotion," and as employment for the people 
passed away, their quantity was more and more increased, and 
they then were made a legal tender, but there existed then no or- 
ganized government capable of giving protection to either property 
or life — none capable of making secure provision for any ultimate 
assumption of payment by the State. The last has been issued by 
an authority the permanent maintenance of which has been so much 
doubted that few have held its securities longer than was required 
for enabling them to pass them off to some one else. They have 
been received by a community that has been cut off from the outer 
world, and whose single source of wealth has wholly disappeared. 
They are now used by one whose numbers are constantly diminish- 
ing, and over a surface that is becoming daily more and more cir- 
cumscribed. When the notes were few in number the Southern 
people were still rich, and, with the exception of Maryland, the 
notes circulated in every State south of Mason and Dixon's Line, 
the Ohio and the Missouri. Now, when they so much abound, the 
rich have become poor, the poor have become poorer, rich and 
poor to a great extent have passed out of existence, and the thea- 
tre of circulation has become limited to portions of half a dozen 



136 



States. No one desires to convert Confederate paper into a 
permanent security, it being clearly obvious that of security for 
future payment there can be none. The notes will still at some 
price help to pay for a negro or a horse, but the bonds will not do 
so at any price whatsoever. 

Contrast here, my dear sir, the circumstances above described 
with those under which our " greenbacks" have been issued. They 
have gone out in payment for property purchased of, or services 
rendered by, persons who have freely sold the one or rendered the 
other. The authority by which they have been issued is one quite 
as capable of binding posterity as was the Government of Wash- 
ington and Adams. They are used by a people whose numbers 
are constantly growing, and whose productive powers are steadily 
increasing in the ratio which they bear to population. The man 
who receives them finds himself surrounded by other men who 
gladly give him houses and lands at prices little greater than those 
he would have paid ten years since, and before the great free trade 
crisis of 1851. In all this the Government co-operates by author- 
izing him to deposit with its officers, for periods long or short, any 
amount for which he may not have present use, receiving in return 
certificates by means of which he can withdraw the amount on 
giving certain notice; or at his pleasure receive bonds payable in 
three, four, ten, twenty, or forty years, receiving interest in gold 
or paper, according to the terms agreed upon ; and here we 
have a security against depreciation the like of which the world 
had never seen before. It is a safety valve such as could not 
have been provided by any of the authorities to'which the world 
has been indebted for those chapters of financial history which 
are connected with the Continental paper, the Assignat, or the 
Confederate notes. 

Having thus shown what had been the circumstances under 
which the ' 1 greenbacks" have been offered for acceptance by the 
world, I propose now to show what is the extent to which they 
have been issued, and what have been the gold phenomena by 
which that issue has been attended. 

The first batch of notes amounted to $60,000,000, and were 
issued under laws passed in July and August, 1861. Nearly the 
whole of these have since been withdrawn and cancelled. 

The second emission was under a law of February, and the third 
under one of July, 1862, giving us at the close of that year a total 



13T 



Government circulation of little less tban $300,000,000. The price 
of gold as yet had changed but slightly. In June, 1862, it still 
stood at 104. In July and August it fluctuated between 109 and 
119. In October it rose to 124, and for the rest of the year it 
varied between 130 and 137. Compared with what we since have 
seen, the advance thus far seems as very trifling; and yet the 
amount of legal tender notes then existing bore a very much larger 
proportion to the number of persons to whom a currency was to 
be supplied — to the busiuess that was to be transacted — and to 
the surface that was to be covered than is at this moment borne 
by the notes now in circulation. Such being the case, as I pro- 
pose to show it is, we must certainly look elsewhere for the cause 
of the present price of gold. 

In February, 1863, that price rose to 171. Why was this? 
Not certainly because of any increase in the " greenback" circu- 
lation, the further emission of these having been accompanied by 
the withdrawal of the original $60,000,000 of treasury notes of 
which but $3,351,000 remained out in the following June. Tire 
amount of circulation must, therefore, have been but little more 
at this time, when gold was at 171, than it had been in the pre- 
vious autumn when its price ranged between 115 and 124. 

In the following month a further issue to the extent of 
$150,000,000 was authorized, and, according to the generally re- 
ceived theory, gold should now have risen. Did it so ? On the 
contrary it fell, and in July, although the greenbacks then out- 
standing amounted to $400,000,000, was as low as 124. As it 
seems to me, we cannot in this direction find the cause of changes 
such as these. 

In September the greenbacks issued had risen to $415,000,000, 
and the price of gold to 143. The two, however, could have had 
no necessary connection with each other, gold being now much 
lower than it had been iu the previous February, while the circu- 
lation was higher by little less than $100,000,000. 

By the act of March, 1863, the Secretary had been empowered 
to issue interest-bearing notes, legal tender for their face, to the 
extent of $400,000,000. Of this power no use appears to have 
been made prior to the first of October of that year. In that and 
the following month there were issued of greenbacks $15,000,000, 
and of interest-bearing legal tenders $35,000,000 ; and it is fair 
to assume a further issue for December of $30,000,000, bringing 



138 



up the total amount to nearly $500,000,000. What was the effect 
of this upon gold ? Did it carry it up to, or beyond, the price at 
which it had stood in the previous February ? On the contrary, 
although in the meantime $200,000,000 had been added to the 
legal tenders issued, it remained 20 per cent, lower, the price on 
the first of January being only 151. How the opponents of what 
is called " the paper money system" can reconcile these facts, I do 
not clearly see. 

Since then the price has been nearly as follows : — 

January . . . 15-7 May 192 September . . 220 

February ...159 June .... 240 October . . . 220 

March. .... 165 July .... 276 November ... 230 

April .... 178 August .... 257 December ... 220 

Throughout the whole of these latter months there had been the 
most violent fluctuations, but these figures will, I think, suffice to 
give you, my dear sir, a general idea of the whole movement. 

What, in the meantime, had been the course of the Treasury in 
regard to the issue of legal tender notes ? For a reply to this, 
question I must refer you to the following figures exhibiting the 
state of that portion of the public debt on the first of November 
last : — 

I. Of greenbacks the amount then outstanding was . $433,000,000 
II. Of one year notes 43,000,000 

III. Of two year notes 16,000,000 

IV. Of two year coupon notes 61,000,000 

V. Of three year notes . . . . . . 102,000,000 

$655,000,000 

The amount is here shown to have been greater by about one 
hundred and fifty millions than it had been a year before, but of 
this how much was there that really remained in circulation ? At 
the present moment, as I am assured, two-thirds of Nos. II., 
III., and IV. have been absorbed by individuals and institutions, 
and have ceased to constitute any portion of the circulation. Such, 
likewise, is the case with a portion of No. V. Admitting, now, 
the quantity since issued of this last to be equal to the amount of 
the others so absorbed in the last three months', we obtain, as a 
deduction from the above apparent circulation, the large sum of 
$80,000,000, and thus reduce the real amount to $575,000,000. 



139 



Is this, however, all the deduction needed to be made ? By no 
means 1 Throughout this period banks have been parting with 
their gold, and substituting for it United States notes, both de- 
mand and interest-bearing, and individuals, to a vast extent, have 
followed their example. The farmer pays for what he needs in 
local notes, but he puts aside his " greenbacks." The miner and 
the mechanic — the laborer and the village shopkeeper — the soldier 
and the sailor — the immigrant who is seeking to invest his little 
capital, and the sempstress who is trying to accumulate the means 
with which to purchase a sewing-machine — all of these have become 
hoarders of "greenbacks," which have thus been withdrawn from 
circulation, and have, for the time being, no more influence upon 
either the gold or produce markets than they would have had they 
been altogether blotted out of existence. Adding now together 
all these quantities, we shall, as I think, readily obtain the sum of 
$15,000,000, and thus reduce the actual Treasury circulation to 
the precise point at which it stood at the close of 1863, when the 
price of gold was 151. 

There is, however, another portion of the circulation which now 
demands attention. At the date of which I have spoken there 
were in existence 631 national banks, with an authorized capital 
of $428,000,000, to which there had been issued notes amounting 
to $72,000,000. To what extent those notes had then been circu- 
lated we cannot tell, but we know, from the Report of the Com- 
missioner of the Currency, that on the first Monday of the previous 
October their actual circulation amounted to only $45,260,000, to 
meet which, and to provide for payment of their depositors, they 
held, in "specie and other lawful money," $44,801,000. Of the 
first, the quantity held is likely to have been very small indeed, but 
admitting it to have been even as much as $10,000,000, and that 
another sum of equal amount had been in the form of interest- 
bearing legal tenders, the quantity of "greenbacks" held by them 
must have been $25,000,000. This would reduce their apparent 
addition to the quantity of "paper money" to but $20,000,000 ; 
but when we take into view the fact that in the year embraced in 
the Report 168 State banks had become national institutions, and 
that, to the extent of their issues, the new notes had been mere 
substitutes for those previously in existence, we see that the real 
addition thus made to the circulation had been a quantity too 
small to be worthy of any serious attention. 



140 



At the date of the battle of Gettysburg, say July 3, 1863, the 
legal tender circulation was, as has been shown, $400,000,000, with 
gold at 124. With a present circulation of only $500,000,000, 
gold is above 200 ; and yet, as I propose now to show, its amount 
is very far less, in proportion to the space over which it is circu- 
lated, to the population to be supplied, and to the work to be 
done, than it was at the date to which I have referred. 

At that time we had secure possession of scarcely any portion 
of the country south of Mason and Dixon's Line, the Ohio and 
the Missouri. We did, it is true, still hold Washington, but a 
rebel army was then in Maryland. South of that, in the Atlantic 
States, we held Fortress Monroe, Norfolk, Newbern, Hilton Head 
and its immediate neighborhood. Kentucky was then exceedingly 
disturbed, while Tennessee was mainly occupied by rebel armies. 
Missouri was, in almost its whole extent, a "debateable land," 
while rebel forces occupied nearly the whole of Arkansas and by far 
the larger portion of Louisiana. On the Mississippi we held 
Memphis at the north and New Orleans at the South. Through- 
out the border and Southern States, therefore, there was little 
work being done, and little use for circulation of any description 
whatsoever; and of what was used nearly the whole consisted of 
Confederate notes. 

To-day, the Federal circulation is needed throughout Maryland, 
the larger portion of old Virginia, Kentucky, Tennessee, Missouri, 
Arkansas, much of Mississippi and Louisiana, parts of Georgia, 
Alabama, and North Carolina, and throughout the whole region 
bordering on the Mississippi. It is needed, too, by every emi- 
grant to Minnesota, Nebraska, Colorado, and Nevada ; and thus, 
while we have, in the last eighteen months, added largely to the 
• population to be supplied, we have almost doubled the territory 
within which that population may be found. 

Simultaneously with all this we have added little less than one- 
half to the productive powers of our people, and to the transactions 
for facilitating which a general medium of circulation is required. 

Having studied these things you will, my dear sir, as I think, 
be disposed to agree with me in the conclusions at which I have 
arrived, as follows : — 

That the circulation bears now a much smaller proportion to 
the need for it than it did at the time when gold stood at 124. 



141 



That to this is to be attributed that the " greenback" is fre- 
quently so scarce as to interfere, and that seriously, with the 
operations of the Government ; and 

That, if we desire to find the cause of the present high price of 
gold, it is in quite another direction we must look for it. 

What that direction is I propose to show in another letter, and 
meanwhile remain, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, February 13, 1865. 



THE CURRENCY QUESTION. 



LETTER FOURTEENTH. 

Dear Sir :— 

The power of a bank to make loans is derived from the use 
of its capital ; from its power to furnish circulation ; and from its 
further power to apply to the purchase of securities the moneys 
standing to the credit of those with whom it deals, and known by 
the name of deposits. 

That it is not to the use of the first we are indebted for the in- 
flation now complained of is very certain. That variations in 
the second have been only those consequent upon changes other- 
wise produced has been already shown. There remains, then, only 
the third, and to that it is that I now propose to call your atten- 
tion, first, however, asking you to accompany me for a moment in 
an examination of the effect which necessarily results from the loan 
by banks of moneys for which they themselves are indebted to others, 
and which they may, at any moment, be called upon to refund. 

Let us suppose you, yourself, to have received on any given day 
notes, or specie, amounting to ten, fifteen, twenty, or fifty thousand 
dollars, and that while waiting to re-invest them you have placed 
them in your safe. Going now on change, you find that sum to 
be there represented by yourself alo?ie. 

Let us next suppose that instead of so placing them you had 
had them put to your credit in a neighboring bank, and that 
the bank had forthwith lent them to a dealer in money, or in stocks. 
Going on change under these circumstances you find your money 
twice represented ; first by yourself who have it, as you suppose, in 
the bank; and next, by the man who had borrowed it and had had it 
put to his credit precisely as it had previously been placed to yours. 
Here is a very simple operation by means of which the amount of 
deposits has been doubled by the action of the bank itself ; and 
here it is that we find the cause of all the inflation of which we 



143 



so often have had reason to complain, and to which, as I propose 
to show, we chiefly owe the numerous and extraordinary changes 
in the price of gold. 

By the last report of the Superintendent of the New York banks 
the amount for which they then stood indebted to individuals, 
called depositors, was nearly $250,000,000. The owners of this 
vast sum might be seen passing up and down Wall Street, as fully 
ready to purchase stocks or notes as they could have been had it 
been in their private safes. Side by side with them, however, 
might be seen other individuals to whom that same amount had 
been lent, and who were equally ready to bid for any securities 
that might be offered. The $250,000,000 of capital had thus 
become $500,000,000 of currency, so to remain until the owners 
might claim to be repaid. The bank then making the same de- 
mand upon its debtors the $500,000,000 of currency would forth- 
with shrink into its original dimensions, and become once again 
but $250,000,000. 

No such general demand would, of course, ever be made, and 
that none such has been needed for producing the crises of the past, 
or the gold excitements of the present, will be seen on an exa- 
mination of the following figures, presenting, in millions, the 
movements of the New York banks before and after the great 
crisis of 1857 : — 

June '56. Sept. '56. June '57. Sept. '57. Dec. '57. 

Capital ... 92 96 104 107 107 

Circulation . . 31 34 32 27 24 

Leaving the circulation now wholly unprovided for, we will take 
the amount of the so-called deposits, and set against these latter 
the whole amount of specie with a view to ascertain what had been 
the amount of currency created by the hallooning system: — 



Deposits . 


. 103 


104 


109 


85 


83 


Specie . . 


. 14 


15 


14 


14 


29 


Lent out . 


. 89 


89 


95 


71 


54 



In the first two of these periods 89 millions of real capital had 
become 178 of currency. In the third that currency had risen to 
190. In the last it had, by the simple process of calling in loans, 
been carried down to 108. 

The facts here exhibited in regard to the circulation are — 
First, that up to the moment just preceding the explosion there 



144 



had not only been no increase, but an actual reduction in its 
amount ; second, that that reduction had been consequent upon 
a closing of workshops and suspension of business otherwise 
produced ; and third, that, notwithstanding the almost entire sus- 
pension of business, the apparent reduction was but $8,000,000. 
That the real one must have been very far less than this will be 
obvious to all who know how large is the amount of notes of 
other banks remaining unexchanged, and for the time being out 
of circulation, at a time of financial ease, compared with that which 
is so retained in a period of crisis as severe as that now under exa- 
mination. 

Those exhibited in regard to the process of duplication to which 
your attention has been called, are as follows : — 

First. The very small increase that had been required for pro- 
ducing the largest excitement throughout the country at large. 
The total amount from June, 1856, to June, 185*7, was, as here is 
shown, but six millions; and yet there had been thus produced an 
inflation of the value of property throughout the country to the 
extent of many hundreds of millions : 

Second. The very small reduction required for precipitating a 
whole community into a state of absolute and entire ruin, such as 
existed at the date of the last returns here given. The whole 
reduction had been but forty-one millions, and yet the changes in 
the value of property thereby produced counted certainly by thou- 
sands of millions. 

What caused the rise? The use by banks of the property of 
others. What caused the fall? The demand of the banks for 
payment by their debtors. Who suffered? Every man who was 
in debt. Who profited? Every one who had the command of 
money. The rich were thus made richer and the poor made 
poorer by means of an inflation caused by the action of those 
very bank managers who, in all times past, had largely profited of 
such changes. 

With all this, as has been shown, the circulation had nothing 
whatsoever to do, nor could it have, for the reason that that portion 
of the currency is governed by the people themselves, and not in 
any manner controlled by bank directors. Nevertheless, all our 
laws are framed as if the circulation were really the portion which 
needed regulation. 

Following out the view thus presented I give you now, in 



145 

the following figures, the movement of the same institutions in the 
past four years: — 

June June Dec. June Sept. Mar. June Sept, 
'61. '62. '62. '63. '63. '64. '64. '64.' 

Capital . . . . 110 109 109 108 109 109 108 107 
Circulation . . . 26 39 39 32 33 31 32 33 

In the first of these periods the circulation was small because 
our people were almost wholly unemployed. This was a conse- 
quence of error elsewhere, and not itself a cause of error. 

Deposits and bank balances . 139 206 258 272 288 354 298 297 
Specie and bank balances . 60 55 65 63 53 46 43 40 

Lent out . . . . 79 151 193 209 235 308 255 257 

The duplication of these vast sums, consequent upon the very 
simple process of placing money to the credit of A, as a depositor 
of his own property, and to that of B as a borrower of the same 
money, gives the following very remarkable figures: — 

158 302 386 418 470 616 510 514 

Price of gold at same dates par 103 131 147 128 161 195 255 

to to to to to to 

109 133 142 165 245 191 

The seventh column gives the precise period of the agitation 
caused by the passage of the gold bill; and from that to the eighth 
we have in the price of gold the effect of the extreme depression 
of the public mind of July and August last. It is by no means 
to be assumed that the gold variations have been altogether caused 
by the inflation above exhibited; but, that they have to nearly 
their whole extent been so, the figures above most clearly prove. 
Were bank loans reduced to the point at which they stood three 
years since, gold would be now as cheap as it was then. 

The addition to the currency that had thus been made by 
the banks of the single State of New York, in comparing March, 
'64, with June, '61, appears to have been precisely $229,000,000. 
In all such movements the rest of the country, although at a long 
distance, follows suit to New York city. Three years since, 
when gold was still at par, the debts, called deposits, of the Penn- 
sylvania banks, stood at $25,000,000. A year since, with gold at 
165, they had already doubled; and since that time the movement 
in the direction of expansion has been at a greatly accelerated 
10 



146 



pace. In the last twelve months the deposit line of the Phila- 
delphia banks alone has increased $14,500,000, most of their gold 
meanwhile having been converted into interest-bearing legal tender 
notes. As a consequence of all this, the interest-bearing securities 
held by them are little less than quadruple the amount of their 
capital. The inflation of this city alone is greater than was that 
of New York city prior to the great crisis of 185*7. 

The addition thus made to the currency of Pennsylvania can 
scarcely be estimated at less than $40,000,000. Allowing now 
for all the rest of the loyal States only twice that sum, we obtain 
$120,000,000, which, added to that of New York, gives us a total 
of $349,000,000. 

Of what does this addition consist ? Of precisely the same 
material that is used for inflating all other balloons — gas, and 
nothing else. The slightest pinhole causes it to disappear, and 
therefore is it that we meet with changes in the dimensions of the 
machine violent as are those here exhibited in figures representing, 
in millions, the loans, throughout the past year, of New York city 
banks : — 



January . . 174 to 162 July ... 198 to 185 

February . . 163 to 174 August . . 185 to 188 

March . . 182 to 199 September . . 189 to 185 

April ... 203 to 194 October . . 185 to 186 

May ... 198 to 195 November . . 187 to 192 

June ... 196 to 197 December . . 196 to 204 



At one moment, as we see, gas is injected, and prices of gold, 
stocks, and commodities generally throughout the country, rise — 
and then the initiated sell. At another, it is compelled to escape, 
prices then falling, to the great advantage of those who had so 
lately sold. Such is the movement that is allowed to remain un- 
regulated, the aid of Congress being meanwhile invoked in favor 
of establishing control over a circulation already regulated by 
means of that "higher law" which subjects to the popular will that 
portion of the financial movement. 

Most widely different from all this is the action of that portion 
of the currency furnished by the Treasury, and known by the 
popular name of "greenbacks." In the one case, the addition 
represents nothing but the will of certain persons whose inte- 
rests are to be promoted by expansion, to be followed, on the 
succeeding day probably, by contraction. In the other, it repre- 



147 



sents property delivered or service rendered to the Government. 
In the one, it is local, and the effect upon prices is great in 
proportion to the limitation of the space. In the other, it is paid 
out to the soldier, wherever found, whether in the hospitals of 
New England, the camps of the Centre, or the armies of the South 
and Southwest. It goes into the pocket of each individual, there 
to remain until he can find an opportunity to send it home, or in 
some other manner to use it for his private benefit. It goes 
into the pockets of farmers, miners, mechanics, laborers, sailors, 
traders large and small, enabling each and every one to buy for 
cash, and cheaply, what before he could obtain only at the single 
shop at which he could have credit. It helps to build ships on 
the Atlantic and the Pacific, on the lakes, and on the Mississippi; 
and it pays the men who sail or work those ships. It enters into 
every home of the Union, and into every old stocking by help of 
which the sewing-woman is preparing for the purchase of a ma- 
chine, or the laborer for that of a house. The field of its 
operation is coextensive with the Union, and its power to affect 
injuriously the prices of gold, labor, or commodities generally, is 
in the inverse ratio of the extent of that field. Nevertheless, to 
prevent the possibility of injury from that source, the Treasury has 
created an acceptable investment, coextensive with the "green- 
backs" in amount, by means of which every holder is enabled 
to convert into an interest-bearing security whatsoever surplus 
may be in his hands. Having thus provided a perfect escape-valve, 
neither the captain nor the crew need fear explosion. 

The banker, on the contrary, desires that there may be no valve 
whatsoever but that which he himself controls. When it suits 
him, he injects the gas, and continues so to do until he has arrived 
as near as he dares to go to the point at which explosion may be 
looked for. Next he withdraws the gas with equal rapidity, and 
thus produces crises like that of 1857, the following brief account 
of which, taken from Gibbons's Banks of New York, may now, 
my dear sir, have some interest for you : — 

"The most sagacious of our city bank officers saw no indications 
of an unusual storm in the commercial skies. When the loans 
reached the unprecedented height of one hundred and twenty-two 
millions of dollars, on the eighth of August, they pointed to the 
annual reduction of ten or twelve millions in the autumn months, 
as one of the regular ebbs to which the market is subject ; but 



148 



they had no foresight of extraordinary pressure, and no dreams of 
panic. Credit was extended, but 'the country never was so rich.' 

" The banks began to contract their loans about the eighth of 
August. Securities immediately fell in price at the Stock Board. 
The failure of a heavy produce house was explained by the de- 
pression of that particular interest in the market. A report of 
dishonest jobbing, and of the misuse of funds in a leading railway 
company, caused partial excitement, without seriously disturbing 
confidence in mercantile credit. 

" On the twenty-fourth of August, the suspension of the Ohio 
Life Insurance and Trust Company was announced. It struck on 
the public mind like a cannon shot. An intense excitement was 
manifested in all financial circles, in which bank officers partici- 
pated with unusual sensitiveness and want of self-possession. Fly- 
ing rumors were exaggerated at every corner. The holders of 
stock and of commercial paper hurried to the broker, and were 
eager to make what a week before they would have shunned as a 
ruinous sacrifice. 

" Several stock and money dealers failed, and the daily meetings 
of the Board of Brokers were characterized by intense excitement. 

"Every individual misfortune was announced on the news bul- 
letins in large letters, and attracted a curious crowd, which was 
constantly fed from the passing throng. 

"The Clearing House report for the twenty-ninth of August — 
the first after the suspension of the Ohio Life Insurance and Trust 
Company — showed a reduction of four millions of dollars in the 
bank loans during the previous week. 

"The most substantial securities of the market fell rapidly in 
price at public sale. 

" The safety of bank-notes in circulation was suspected or denied. 
The publishers of counterfeit detectors spread alarm among the 
shopkeepers and laborers, by selling handbills with lists of broken 
banks, which were cried about the streets by boys, at ' a penny 
a-piece.' 

"One of the Associated Banks fell into default at the end of 
August, and a fraud of seventy thousand dollars by the paying 
teller roused suspicion of similar misconduct in other institutions. 

"The regular discount of bills by the banks had mostly been 
suspended, and the street rates for money, even on unquestionable 
securities, rose to three, four, and five per cent, a month. On the 
ordinary securities of merchants, such as promissory notes and bills 
of exchange, money was not to be had at any rate. House after 
house of high commercial repute succumbed to the panic, and 
several heavy banking firms were added to the list of failures. 

" The settlements of the Clearing House were watched with the 
expectation of new defaults; and their successful accomplishment, 
each day, was a subject of mutual congratulation among bank 
officers. 



149 



" The statement of the city banks for the week ending Septem- 
ber 5th showed a further reduction in the loans of more than four 
millions of dollars. 

. " Commercial embarrassments and suspension became the chief 
staple of news in all the papers of town and country. The pur- 
chase and transportation of produce almost entirely ceased. 

"From this period, there was nothing wanting to aggravate the 
common distress for money. The failure of the Bank of Pennsyl- 
vania, in Philadelphia, was followed by that of the other banks of 
that city, and by those of Baltimore, and of the Southern Atlantic 
States generally. Commercial business was everywhere suspended. 
The avalanche of discredit swept down merchants, bankers, moneyed 
corporations, and manufacturing companies, without distinction. 
Old houses, of accumulated capital, which had withstood the vio- 
lence of all former panics, were prostrated in a day, and when they 
believed themselves to be perfectly safe against misfortune. 

" The bank suspension of New York and New England, in the 
middle of October, was the climax of this commercial hurricane. 

" Such is the outline of the most extraordinary, violent, and de- 
structive financial panic ever experienced in this country. What 
caused it ? To what source or sources can it be traced? Where 
lies the responsibility of it ? What lessons does it teach ? What 
preventives are indicated against the recurrence of similar disas- 
ter? These are questions which agitate the public mind, and which 
ought to be answered, if possible, for our instruction and future 
guidance." 

Seeking an answer to these questions, the author furnishes a 
full statement of the movement, its result being that of showing, 
as he says, "beyond cavil, that the banks, not the depositors, took 
the lead in forcing liquidation. In the twenty days prior to the 
26th of September," as he adds, "the deposits fell off but $341,146, 
while the resources of the banks were increased $6,691,179." 

The men who had taken "the lead" in measures which had 
prepared for the explosion proved now to be those most active in 
" forcing liquidation," and thus enabling themselves to purchase, 
at low prices, stocks, bonds, and real estate which they had sold 
at high ones. Aided by the large fortunes thus acquired men of 
the same stamp are this day exercising a power thrice greater than 
was then exhibited, the tendency of all their measures being in the 
direction of making the poor poorer and the rich richer than ever 
before ; those of the Treasury, meanwhile, looking in a precisely 
opposite direction, and tending to lower the rate of interest, while 
increasing the power over his own actions exercised by the laborer, 
the miner, the mechanic, and the farmer. 



150 



The " greenback" has fallen on the country as the dew falls, 
bringing with it good to all and doing injury to none. The gas- 
formed currency, on the contrary, is in the financial world what 
the water-spout is in the natural one. Whirled about by the wind, 
and wholly uncertain in its movements, none can predict of this 
latter when or where its effects will most be felt, and all around are 
therefore kept in a state of fever closely resembling that which dis- 
tinguishes the financial action of the present hour. The deluge 
comes at last, destroying both property and life, and making a 
desert where all before had been happiness and peace. 

It is to restrictions upon the formation of the dew that we are 
now invited, leaving wholly unchecked the action of those who pro- 
fit of the desolation caused by the water-spout. What are the 
results that seem to me likely to be obtained as a consequence of 
acceptance of the invitation, I propose to show in another letter, 
and meanwhile remain, my dear sir, 

Yours, very truly, * 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, Feb. 15, 1865. 



THE CURRENCY QUESTION. 



LETTER FIFTEENTH. 

Dear Sir : — 

The lugubrious predictions of the London Times have, thus 
far, not been verified. The war is now, to all appearance, coming 
rapidly to a close, aud not only are we not yet ruined, but there 
prevails throughout the country a prosperity such as, until recently, 
had never before been known. To what causes may this properly 
be attributed ? How has it been possible that a community should 
have furnished so many hundreds of thousands of men, and so 
many thousands of millions of the material of war, without be- 
coming even poorer than before ? Let us see. 

The act .of secession by the South was an act of emancipation 
for the North. Up to that date the latter had been mere colo- 
nies, governed by those " wealthy British capitalists" whose mode 
of action is so well described in the Parliamentary Report, an 
extract from which has already more than once been given, but 
here repeated because of its powerful bearing on the question now 
before us : — 

" The laboring classes generally, in the manufacturing districts 
of this country, and especially in the iron and coal districts, are 
very little aware of the extent to which they are often indebted for 
their being employed at all to the immense losses which their em- 
ployers voluntarily incur, in bad times, in order to destroy foreign 
competition, and to gain and keep possession of foreign markets. 
Authentic instances are well known of employers having in such 
times carried on their works at a loss amounting in the aggregate 
to three or four hundred thousand pounds in the course of three or 
four years. If the efforts of those who encourage the combinations 
to restrict the amount of labor and to produce strikes were to be 
successful for any length of time, the great accumulations of capital 
could no louger be made which enable a few of the most wealthy 
capitalists to overwhelm all foreign competition in times of great 
depression, and thus to clear the way for the whole trade to step in 
when prices revive, and to carry on a great business before foreign 



152 



capital can again accumulate to such an extent as to be able to 
establish a competition in prices with any chance of success. The 
large capitals of this country are the great instruments of warfare 
against the competing capital of foreign countries, and are the most 
essential instruments now remaining by which our manufacturing 
supremacy can be maintained; the other elements — cheap labor, 
abundance of raw material, means of communication, and skilled 
labor — being rapidly in process of being equalized." 

Profiting of its liberty, the North at once determined on the 
adoption of measures of protection to the farmer in his efforts for 
bringing the consumer of his products to take his place in the 
immediate neighborhood of the place of production, and thus to 
relieve him from the oppressive tax of transportation imposed upon 
him by the system above so well described. The effect of this now 
exhibits itself in the facts — 

That the development of our mineral resources has been great 
beyond all former example : ' 

That diversification in the pursuits of our people now exhibits 
itself in the naturalization of many of the minor branches of in- 
dustry in regard to which we had before been wholly dependent 
upon Europe : 

That the demand for labor has been so great as to cause large 
i icrease of wages : 

That the high price of labor has caused great increase of immi- 
gration : 

That demand for the farmer's products has so largely increased 
as to have almost altogether freed him from dependence on the 
uncertain markets of Europe : 

That the internal commerce has so largely grown as to have 
doubled in its money value the many hundreds of millions of rail- 
road stock : 

That the prosperity of existing railroads has caused large in- 
crease in the number and the extent of roads : 

That here, for the first time in the history of the world, has been 
exhibited a community in which every man who had labor to sell 
could sell it if he would, while every man who had coal, iron, food, 
or cloth to sell could find at once a person able and willing to buy 
and pay for it : 

That, for the first time, too, in the history of the world, there 
has been presented a community in which nearly all business was 
done for cash ; and in which debt had scarcely an existence : 



153 



That, as a necessary consequence of this, there has been a large 
and general diminution of the rate of interest : 

That farmers, laborers, miners, and traders have therefore become 
more independent of the capitalist, while the country at large has 
become more independent of the "wealthy capitalists" of Europe: 

That, so great have been the economies of labor aud its pro- 
ducts, resulting from great rapidity of the societary circulation, 
that, while building more houses and mills, constructing more 
roads, erecting more machinery, and living better than ever before, 
our people have been enabled to contribute, in the form of taxes 
and loans, no less a sum than three thousand millions of dollars 
to the support of government. 

These are wonderful results, and for them we have been largely, 
yet not wholly, indebted to the re-adoption of the protective system. 
That alone'was capable of doing much, but we should have failed 
in the prosecution of the war had not the Treasury, by the esta- 
blishment of a general medium of circulation, given us what has 
proved to be a great clearing house, to which were brought labor 
and all of labor's products to be exchanged. Increased rapidity 
of circulation was a necessary consequence of this, and to that 
increase the greatly improved health of the societary body has 
been wholly due. 

Such having been the results of the two great measures by which 
the first period of Mr. Lincoln's administration had been distin- 
guished, it might have been believed that neither one of them 
would be abandoned without at least a fall and fair inquiry into 
the probable consequences of any changes that might be suggested. 
Those who might have so thought could scarcely, however, have 
reflected upon the general character of our legislation. " No 
people," as it has been said, "so soon forget yesterday." None 
take so little thought of to-morrow. No one looks back to study 
the cause of the good or evil that exists, and it is as a consequence 
of this that we have so constantly relapsed into British free trade 
almost at the first moment that protection had brought about a 
cure of the evils of which it had been the cause. Hitherto, since 
1861, our course has been onward, and in the direction that 
above is indicated. Now, as I propose to show, we are steadily 
retracing our steps; and if the forward movement has led us to 
our present prosperous state, it can scarcely well be doubted that 
the backward one will lead us once again to that calamitous one 
from which we so recently have emerged. 



154 



The most serious move in the retrograde direction is that one 
we find in the determination to prohibit the further issue of that 
circulation to which we have been so much indebted. Why is it 
made ? . Because journalists fancy that it is to "paper money" they 
must attribute the, to them, great fact that paper is so high ! Be- 
cause men who depend on fixed incomes fancy that they should 
live better were the gold standard once again adopted ! Because 
every free-trader in the laud charges the high price of gold to the 
use of "greenbacks," and sees therein the causes why he cannot, 
with profit to himself, fill our markets with British cloth and British 
iron ! 

What is the present effect of the hesitation of the Treasury to 
use the power that yet remains at its command ? It is paralyzing 
the societary movement, to the great loss of both the people and 
the Government. Labor is less in demand. Cloth, iron, and a 
thousand other commodities move more slowly. Why all these 
things ? Because the Treasury does not fulfil its contracts. The 
unpaid requisitions amount to $125,000,000, and the Treasury is 
empty. The contractor who obtains a certificate sells it at heavy 
loss ; while many, as I am told, find difficulties interposed in the 
way of obtaining certificates, most of which have their origin in 
the indisposition to acknowledge debt when there exist no means 
with which to pay it. How it is with the men who are now serving 
in the field was well shown, a few days since, by Senator Wilson, 
when he told his brother Senators that "they needed more money 
than they could obtain to pay their just debts — what they had 
agreed to pay." " Tens of millions of dollars," he continued, are 
now due to our armies, many of whose officers have been unpaid 
for months ; the Generals, meanwhile, holding by handfuls resigna- 
tions tendered by men who find themselves forced to retire, as the 
only means now left to them of providing for their families." 

Turning now to a letter in this day's Tribune, I find a statement 
of the facts of the case, and their effects, to which you may perhaps 
excuse me for asking your attention. It is as follows : — 

" It is useless to deny the fact that men once ardent in the cause 
are becoming lukewarm in their attachment to a Government which 
so sadly fails to discharge, in this respect, its self-imposed obliga- 
tions, and seems so careless of those over whom specially the aegis 
of its protection should be thrown. No wonder that the soldier 
should grow weary when he reflects that his arduous hardships, 
undergone on long marches, in the trenches, on the picket line, 
scorching then under the rays of a midsummer's sun, and shivering 



155 



now in the merciless blasts of winter, exposed to all the inclemen- 
cies of a variable climate, are suffered to go so long unrecognized 
by his Government ; no wonder that when every mail brings him 
the old story of his family's destitution, and when he remembers 
his inability to aid them, he should grow lukewarm in the cause 
which years ago he espoused with all the ardor of a man and a 
patriot. It is in vain that he tries to place country above home — 
above the wife whom he has solemnly sworn to cherish and protect, 
the offspring whom Heaven has given him to support, or the aged 
parents whose infirmities demand his filial consideration ; the 
thought of his domestic responsibilities will absorb all others, and 
will embitter every hour of his soldier-life. 

"Every day resignations are forwarded by officers whom stern 
necessity has compelled to ask for their discharge from the military 
service, in order that they may return home to relieve the pressing 
wants of their families, and shall we say, too, that desertions to 
the euemy frequentfv occur whenever men are impelled by the same 
motives. Officers and men, in making application for leaves and 
furloughs, are often forced to make the humiliating confession that 
they desire to go home to restore order to their households, upon 
which, during their absence, shame and dishonor have fallen, and 
the plea of their families' extreme destitution is still more frequent. 
In the name of humanity, then, let the troops be paid with as little 
delay as possible ; the best interests of the service demand it." 

Entirely in keeping with this are statements coming from the 
West, of the great distress of Government contractors compelled 
to forced sales of the vouchers in their hands — of the great rise in 
the general rate of interest — and of the extremely sluggish state of 
the societary circulation. The Government has made itself respon- 
sible for the financial movement of the country, and when it stops 
payment there is stoppage everywhere. 

Why has it stopped ? Because those in the control of public 
journals fail to see that the cause of the high price of paper and 
of gold cannot be found in the circulation ! Because the Govern- 
ment itself fails to see that the circulation now furnished bears a 
smaller proportion to the needs of the people, and to the extent of 
country requiring to be supplied, than did that which was furnished 
when gold could be bought at an advance of 10, 12, or 15 per 
cent. ! Because all who write or speak on this subject fail to see 
that, with the extension of the power of the Union over the Cotton 
States, there must arise an absolute necessity for furnishing to the 
people of those States machinery of circulation adequate to the 
performance of the same work that has so well been done in these 



156 



Northern States ! So far from diminishing the supply of that 
machinery, there is a pressing necessity for its increase. 

Anxious for a reduction in the price of gold, journalists are 
almost everywhere calling upon Congress to increase the taxes, to 
give up selling machinery of circulation that costs it nothing, and 
to take to buying such machinery at the market price. Obedient to 
their orders the treasury is buying it, and the price at which it buys 
is shown in the following extract from an advertisement of the 
loan that is now on sale : — 

" By authority of the Secretary of the Treasury, the undersigned 
has assumed the general subscription agency for the sale of United 
States treasury notes bearing seven and three-tenths per cent, 
interest per annum, known as the seven-thirty loan. These 
notes are issued under date of August 15, 1864, and are payable 
three years from that time, in currency, or are convertible at the 
option of the holder into U. S. 5-20 six per cent, gold-bearing 
bonds. These bonds are now w r orth a premium of nine per cent., 
including gold interest from November, which makes the actual 
profit on the loan, at current rates, including interest, about 
ten per cent, per annum, besides its exemption from State and 
municipal taxation, which adds from one to three per cent, more,, 
according to the rates levied on other property." 

This is certainly a high price to pay for the use of a little money, 
and the reason why it is so high is that the supply of the com- 
modity needed is diminishing in the proportion borne by it to 
public and private needs. 

We have here, however, only $200,000,000, interest upon which 
is to be paid in gold three years hence. Six hundred millions 
more are now asked for, and the demand is, we are told, to be 
accompanied by a withdrawal of even the existing power to 
furnish legal tenders bearing interest. As those now existing be- 
come more and more withdrawn from circulation, the societary 
machinery must gradually diminish in its quantity, and that, too, 
just at the time when the theatre on which it is to be employed is 
likely to be almost doubled. The necessary consequence of this 
must be such a rise in the rate of interest as will compel the ex- 
port of Government bonds, and the rapid increase of dependence 
on the money markets of Europe — each step backward being thus 
but the precursor of another and greater one. So long as they 
shall continue to be sold abroad money will continue to be obtain- 
able ; but when the foreign market shall have become fully glutted 



15T 



it will, as in the period from 1831 to 1842, become unobtainable 
at any price. 

The gold interest now payable requires $60,000,000. Adding 
these new loans, and making their interest payable in gold, we 
shall, three years hence, need $108,000,000, most of which is likely 
to have to go to Europe. Add now to this, first, the $30,000,000 
required for payment of interest on the old foreign free trade debt ; 
second, only an equal amount for absentees, temporary and perma- 
nent ; and we obtain a demand amounting to $168,000,000, that 
must be met before we can purchase a piece of cloth or a ton of 
iron. Where is all this gold to come from ? 

Tax the people ! is the answer. Give us an income tax of 25 
per cent.! Tax sales ! Tax manufactures ! All this is being done, 
and so thoroughly that important branches of manufacture are 
likely to be taxed entirely out of existence. Paying his taxes in 
paper, and obtaining cash for his products, the ironmaster can 
scarcely even to-day make head against those " wealthy capitalists" 
of England who have already placed themselves on such a footing, 
as regards freight and duty, that it is they who, under a gold system, 
will be protected, and not their American competitors. So, too, 
with paper, the domestic taxes on which are ten per cent., while 
foreign paper is likely to be admitted at three. So, too, as I under- 
stand, is it with leather. Mr. Sherman tells us that $40,000,000 
in gold will be required to purchase paper abroad that if made at 
home would yield $10,000,000 to the treasury. Add to this 
$100,000,000 to pay for the iron needed for taking the place 
of that now made in furnaces that will then be out of blast, 
and we shall have quite enough to pay to those European nations 
whose markets are now glutted with food, and who have taken 
from us, in the past five months, of flour, wheat, and corn, just as 
much, and no more, as would command in gold somewhat less 
than two millions of dollars* 

The contributions to the internal revenue made by paper, iron, 
and leather, appear, under the retrograde system now inaugurated, 
likely to be very small indeed. How will it be with other manu- 
factures, paying as they must, at a gold value, duties that had been 
laid when two dollars in paper had been but the equivalent of one 

* The precise quantities of these commodities shipped to Belgium, France, 
and Britain, has been : Of flour, 59,998 barrels ; of wheat, 1,305,313 bushels ; 
and of corn, 56,933 bushels. 



158 



in gold ? How will it be with the farmer, obliged to look to Europe 
for a market for his products ? How will it be with the miner and 
the laborer when rolling-mills are closed and mines have ceased to 
be worked ? The answer to all these questions will be found in 
the simple propositions, that the power of accumulation increases 
almost geometrically as the rapidity of the societary circulation 
increases arithmetically ; and that it declines in the same propor- 
tion as the circulation becomes more languid. In the few years 
through which we just have passed it has been increasing rapidly, 
but, under the change of policy that has been now inaugurated, it is 
already slowly moving in the opposite direction. Admitting the 
truth of those propositions, then must it be also admitted that, 
prompted by an anxious desire once again to handle gold, we are 
killing the goose that has already laid the many golden eggs so well 
described in the following paragraph, from this day's Tribune: — 

"The internal revenue for the month of January just past 
amounted to the enormous sum of $31,076,902 89 — over a million 
of dollars a day, including Sunday ! And yet confessedly the 
machinery for collecting this branch of the nation's income is im- 
perfect and undergoing change. Vast as is that sum of internal 
revenue, daily and monthly, how light a burden is it to the business 
of this rich and vigorous nation 1 And with what patriotic cheer- 
fulness and acquiescence the people pay this tax to preserve their 
nation and to maintain democracy." 

To what do we owe these wonderful results of a state of civil 
war? To rapidity of the societary circulation, and to nothing 
else ! To what have we been indebted for that rapidity ¥ To pro- 
tection and the " greenbacks" ! What is it that we are now labor- 
ing to destroy ? Protection and the Greenback ! 

Let us continue on in the direction in which we now are moving, 
and we shall ere long see, not resumption but repudiation ; not a 
contradiction but a confirmation of the predictions of the Times ; 
not a re-establishment of the Union, but a complete and final dis- 
ruption of it. 

"What are the means by which these calamities may be avoided, 
I propose to show in another and final letter, and meanwhile 
remain, my dear sir, 

Yours, very truly, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, February 17, 1865. 



THE CURRENCY QUESTION". 



LETTER SIXTEENTH." 

Dear Sir : — 

The measures now in preparation, as regards both the customs 
and internal revenues, tend, as it appears to me, in the direction of 
stoppage of the societary circulation, of rise in the rate of interest, 
of increase in the power of men engaged in the creation of financial 
water-spouts, and of permanent maintenance of a premium on the 
precious metals. If so, then, if we are ever again to witness here 
the regular redemption of promises to furnish gold and silver, it 
must occur as a consequence of the adoption of a course of policy 
directly the reverse of all that recently has been done, and all that, 
if we are to credit the public journals, is in the contemplation of 
those who are charged with the direction of our financial move- 
ments. 

The existing derangement of the currency is wholly due to the 
action of those who manage the windbag system described in a 
former letter, and while their operations shall continue to be, as 
now they are, wholly unrestrained, financial crises must continue 
to reappear, and the price of gold must continue to be as uncertain 
as is their course of action. Such being the case, it is of high 
importance that proper checks be forthwith instituted, and now, 
for the first time in our history, is it in the power of Congress to 
let us have them. To that end, let us have a law declaring — 

First, that no bank shall hereafter so extend its investments as 
to hold in any form other than those of gold, silver, XL S. notes, 
or notes of national banks, more than twice its capital : 

Second, that in the case of already existing banks whose invest- 
ments are outside of the limits above described, any extension 
thereof beyond the amount at which they stood on the first of the 
present month shall be followed by instant forfeiture of its charter. 

Having thus established a check upon further extension, the 



160 



next step should be in the direction of bringing the operations of 
existing banks within proper limits. To that end, let us have a 
provision imposing on all investments outside of the limits above 
described a tax which, when added to that already existing, shall 
amount for the present year to one per cent. In the second year 
let it be made per cent, on all over 90 per cent, in excess of the 
actual capital upon which dividends are paid. In the third, 1| 
per cent, over 80 per cent. ; and in the fourth, If over TO per cent. 
Thenceforth let the tax grow at the rate of a quarter per cent, per 
annum until, by degrees, all banks shall have so enlarged their 
capitals, or so reduced their loans, as to free themselves from its 
farther payment. 

Holding interest-paying securities TO per cent, in excess of its 
capital, a bank would be always in a condition of perfect safety, 
and could give to its stockholders dividends of at least 8 per cent. 
Such stock would be preferable to almost any other securities in 
the market, and there would be no difficulty in so enlarging the 
foundation as to give to the whole structure the form of a true 
pyramid, instead of the inverted one which now presents itself to 
the eye of all observers. 

Let us have a law embracing these provisions, and we shall then 
be fairly on the way towards the establishment of a financial sys- 
tem the most perfect the world has ever seen. Let us have it, and, 
as you will clearly see, the need for restrictions on the circulation 
will wholly have passed away. The day, indeed, will then be near 
at hand when banks will have ceased to be competitors with the 
Treasury for furnishing circulating notes of any kind, and when 
the nation may profit to, the extent of 50, if not even 60 millions 
a year of the power to furnish the machinery of circulation. 

Simultaneously with the passage of such a law, let the Govern- 
ment determine honestly to pay its debts. The soldier in the field, 
and the officer who is placing his life in daily hazard, have a right 
to demand of the Treasury that it shall give them such certificates 
of its indebtedness as will enable their wives and children to go to 
the neighboring shop and purchase food and clothing.* The con- 
tractor and the shipbuilder have a right to claim that when certifi- 
cates are issued they shall be in such a form as will enable them to 

* The amount now due to the army alone is stated by Senator Wilson 
at the enormous sum of one hundred and thirty-eight millions of dollars. 



161 



avoid the further payment of the usurious interest to which they 
have so long been subjected. Paying promptly, the Government 
will buy cheaply; and should such payment have the effect of 
causing the supply of "greenbacks" to be in excess of the demand, 
the Treasury will thence derive a double benefit : first, in being 
thus enabled to borrow what it needs at reasonable rates; and 
second, in having its need for borrowing diminished by reason of 
the increased stimulus thereby given to that societary circulation 
upon the rapidity of which it is dependent for both the mainte- 
nance and the growth of the Internal Revenue. 

The whole South now requires reorganization, and one of the 
first steps in that direction should be found in furnishing machinery 
of circulation. As much in need of this stands the whole of that 
great West for the development of whose wonderful powers we are 
now exporting in that direction so many hundreds of thousands of 
our people. If the Government does not supply that machinery, 
who is there that can or will do so ? Look carefully, I pray you, 
my dear sir, at the vast field that is to be occupied, and at the 
great work that is to be done, and then wonder with me that the 
Government should permit its soldiers to perish in the field, while 
it is debating the terms of a loan to be made to it by men all of 
whose interests are to be promoted by a diminution of the circula- 
tion and an increase of the rate of interest. Let our soldiers be 
paid, let the credit of the Government be once again re-established, 
let the rate of interest be kept down, and let the Treasury reassert 
its independence, and all will yet go well. 

Having thus, as paymaster, re-established its credit, let it next 
place itself in a creditable position as regards those who had been 
led to see in the Morrill Tariff a pledge of protection against those 
"wealthy capitalists" whose fortunes count by millions, and who 
use those millions as "instruments of warfare" by means of which 
they are enabled to "overwhelm all foreign competition, and to 
gain and keep possession of foreign markets." Let it restore 
those great fundamental branches of industry which constitute the 
pillars of our national temple to the position in which they stood 
in 1861, increasing the duties on foreign products by just so much 
as the taxes since imposed on domestic ones, and the result will 
then exhibit itself in the fact that sugar, tea, coffee, soda ash, and 
other raw materials of food and manufacture, will twice over make 
amends for any loss that may be experienced by the revenue be- 
ll 



162 



cause of the substitution of domestic cloth or iron for that now 
made in foreign furnaces or on foreign looms. 

Let these things be done, and we shall then cease to look abroad 
for purchasers of our bonds. Let this be done, and we shall soon 
find ourselves on the road towards becoming purchasers of those 
now held abroad, every one of which should he redeemed before we 
ever again place ourselves in a position to be required to furnish 
gold and silver in payment of our notes. 

To many it might seem that this would be a postponement of 
resumption to a date so distant that none of them would live to 
see it. Let, however, all such persons study what was done in 
this respect in the brief period of the existence of the tariffs of 
1828 and 1842 ; let them next look to what has been done in the 
past four years ; and they will see that all that I have indicated as 
what is needed to be done, is only what, under a sound and per- 
manent system, may be done before the lapse of the next decade. 

As a rule, reformers desire to move too rapidly, and therefore 
fail to attain their objects. They omit to see that when Nature 
has important purposes to accomplish, she works slowly and with 
almost invisible machinery, as when she sends the daily morning 
dew. When she desires merely to destroy a ship or to root up a 
forest, she sends the tornado or the water-spout. Let us follow 
her example. We have a great work to accomplish, and we should 
now profit of the lesson read to the world in that period which 
followed the close of the great war of the French Revolution, and 
exhibited a scene, of destruction that had never before, in time of 
peace, been witnessed. Believing it to be one that should be care- 
fully studied, I now invite you, my dear sir, to accompany me in a 
brief review of the facts in the order of their occurrence. 

For twenty years the Bank of England had been injecting gas 
into the currency, but with the return of peace it became necessary 
that it should be steadily withdrawn. In the two years from 1815 
to 1817, the bank directors had, by means of the very simple opera- 
tion of calling in its claims on one hand, and reducing its liabilities 
on the other, reduced the apparent quantity of money at the com- 
mand of the community to the extent of £12,000,000, or little 
short of $60,000,000. So far as regarded the operations of society, 
this had been equivalent to a total annihilation of that large sum, 
and to that extent a contraction of the standard by which the com- 
munity was required to measure the value of all other commodities 



163 



and things. Had the yardstick been doubled in length, or the 
pound in weight, for the benefit of all persons who had contracted 
to purchase cloth or corn, the injury inflicted would have been 
trivial by comparison with the change that was thus effected. As 
compared with the property of the people of Great Britain, that 
sum was utterly insignificant, yet did its abstraction cause an arrest 
of the circulation almost as complete as would be that produced 
in the physical body by stoppage of the supply of food. Farmers 
and merchants were everywhere ruined. Of the country banks, no 
less than two hundred and forty — being one in four of their whole 
number— stopped payment ; while one in ten and a half became 
actually bankrupt. " Thousands upon thousands," says Mr. Mc- 
Culloch, "who had in 1812 considered themselves affluent, found 
they were destitute of all real property, and sunk, as if by en- 
chantment, and without any fault of their own, into the abyss of 
poverty." Throughout the country, there was, to use the words of 
Mr. Francis Horner, "an universality of wretchedness and misery 
which had never been equalled, except perhaps by the breaking 
up of the Mississippi Scheme in France." In the midst of all this 
ruin, however, the bank, which had supplied the gas, prospered more 
than ever, for the destruction of private credit rendered its vaults 
and its notes more necessary to the community. 

The groundwork having thus been laid by the bank, Parliament 
passed, in 1819, an act providing for the resumption of specie 
payments, and thus re-established, as the law of the land, the 
standard that had existed in 1*797 — among the most remarkable 
measures of confiscation to be found in the annals of legislation. 
For more than twenty years all the transactions of the United 
Kingdom had been based upon a currency less in value than that 
which had existed in 1796. In the course of that long period, 
land had been sold, mortgages given, settlements made, and other 
contracts of a permanent nature entered into, to the extent of thou- 
sands of millions of pounds, the terms of all of which were now to 
be changed for the benefit of the receivers of fixed incomes, and to 
the loss of those who had land, labor, or the produce of either, to 
sell. As a necessary consequence, land fell exceedingly in price, 
and mortgagees everywhere entered into possession. Labor be- 
came superabundant, and the laborer suffered for want of food. 
Machinery of every kind was thrown out of use, and manufacturers 
were ruined. Manufactures, being in excess of the demand, were 



164 



forced upon foreign markets, to the ruin of the capitalists and work- 
men, miners and machinists, of the other countries of the world. 

Peace had brought with it widespread ruin, but it everywhere 
enriched the money-lender — his commodity rising, while land be- 
came so cheap that he could purchase at less than half its previous 
price. The annuitant and office-holder profited — their dividends 
and salaries having become payable in coin, that would purchase 
double the quantity of food and clothing for which they had at 
first contracted. Farmers and laborers, mechanics and merchants, 
were impoverished — their taxes remaining unchanged, while their 
labor, and its products, commanded less than half the money for 
which they would before have sold. 

Bad as is this, it will be infinitely worse with us if we shall at- 
tempt to follow the example here placed before us. Let us put our 
house in order ; let us adopt the measures needed for making the 
Declaration of Independence something more than a mere word 
of small significance ; let us do all this slowly and quietly, and we 
shall set to the world an example in peace even more remarkable 
than that which has been set in the course of the present extraor- 
dinary war — returning to the old standard, and without the occur- 
rence of the slightest crisis. 

That this may be done, it is needed only that those who direct 
our fiscal operations shall recollect that the National Treasury 
has now become a partner in, and entitled to the lion's share of, 
the profits of every mine, every furnace, every mill, every work- 
shop, and every farm in the land, and that every increase in the 
prosperity of such works must be to it a source of double profit : 
first, that arising out of the direct contributions of the work itself ; 
and second, that resulting from the increased consumption of sugar, 
tea, coffee, and other commodities consumed by those who mine 
the coal, roll the iron, and make the engines and the cloth. The 
day for a clear perception of the existence of this harmony of all 
real interests may or may not be near at hand. For the promotion 
of its arrival, we need to see extended throughout the Union the 
same principle of association that has proved to be so effective 
throughout the present war. We need to see a great national 
league, embracing men who grow wool, and others who convert 
it into cloth ; men who make iron, and others who need railroad 
bars ; men who raise food, and others who combine food and ore 
into iron ; men who build ships, and others who consume the 



165 



sugar and the tea that ships transport ; and finally, men who pay 
taxes, and others who make the laws under which those taxes are 
collected. In the words of Jackson, we need to be Americanized. 
Whenever the day shall arrive when we shall have so become, 
then, and not till then, shall we have placed ourselves in a position 
successfully to contend for the control of the commerce of the 
world, and thus to 

Outdo England without fighting her. 

That control will find its place among the hands and heads of 
the community that makes and uses the largest quantity of iron. 
A single decade of the system above described would suffice for 
placing us, in this respect, side by side with England. At the 
close of another, she would be left far behind, and we should then 
have vindicated our claim to that position in the world of which 
our people so often talk, and of the true means of obtaining which 
they so little think. 

Hoping that the event may prove that the time for serious 
thought has now really arrived, and begging you to excuse my 
numerous trespasses on your attention, I remain, my dear sir, with 
great regard and respect, 

Yours, faithfully, 

HENRY C. CAREY. 

Hon. Schuyler Colfax. 
Philadelphia, February 18, 1865. 



THE RESOURCES OF THE UNION. 



A LECTURE 



Read December, 1865, before the 



AMERICAN GEOGRAPHICAL AND STATISTICAL SOCIETY, 
NEW YORK; 



AND BEFORE THE 



AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SOCIAL 
SCIENCE, BOSTON. 



BY 

HENRY C. CAREY. 



PHILADELPHIA: 

HENRY CAREY BAIRD, 

INDUSTRIAL PUBLISHER, 
406 WALNUT STREET. 

1 8 6 6. 



OUR RESOURCES. 



It is of the resources of the Union, gentlemen, that I propose this even- 
ing to talk with you. By those who usually speak or write on that subject 
we are constantly told of the vast extent of our yet unoccupied land, of the 
great deposits of fuel and metallic ores by which our soil is underlaid, and 
of the rapidly-growing numbers of our population; and yet, if we look 
to Russia, Turkey, Canada, Mexico, or South America, the countries in 
which such land most exists; or to that European one, Ireland, in which 
the growth of population has been most rapid ; we find among them pre- 
cisely those in which land has the smallest money value, capital is most 
rare, interest at the highest rate, and the workingman most nearly in the 
condition of bond slave to the landholder or other capitalist. Turning 
our eyes homeward and comparing the different portions of the Union, we 
find, in the States south of the Potomac, the greatest natural advantages 
coupled with a population whose natural increase has been even greater than 
that of these Northern States ; yet there it is that land has been cheapest, 
that capital has least increased, that interest has been at its highest point, 
and that the laborer has been most enslaved. Passing thence to the New 
England States, we find that, though wholly destitute of natural advantages, 
land is there scarce and high in price and man is free, while capital 
abounds, and interest, though high when compared with certain parts of 
Europe, is very low by comparison with almost any other portion of this 
Western Continent. 

Crossing the Atlantic and comparing two of the smaller kingdoms, near 
neighbors to each other, Ireland and Belgium, both possessing great natural 
advantages, we find differences closely approaching those which are here 
observed. In the. first, capital has been so scarce that, while holding the 
laborer in a condition nearly akin to slavery, the middleman possessor of 
money has been enabled utterly to ruin a large proportion of those who 
formerly owned the land ; in the latter, on the contrary, land commanding a 
higher price than in any other part of Europe, and the use of money being 
readily obtained at the lowest rate of interest. Turning next to the French 
and Turkish empires, we find ourselves face to face with phenomena similar 
in character and even yet more remarkable for their extent. The former 
has no important natural advantages, yet is its land nearly on a par with 
that of Belgium, while capital so much abounds that money is readily there 



4 



obtainable at moderate interest. The latter, on the contrary, has every con- 
ceivable natural advantage, fertile land abounding and the climate being among 
the best in the world, while fuel and metallic ores exist in great abundance; 
yet there it is that, of all Europe, land is cheapest, interest highest, and the 
laborer most depressed ; and that, as a necessary consequence, the State is 
weakest. 

Comparing Germany of the past and the present we meet with similar 
contrasts. Forty years since she exported wool and rags and imported 
cloth and paper, and then her people were poor and her land very low in 
price, while she herself was little better than a mere tool in the hands of 
foreign powers. Now, she imports both wool and rags and exports both 
cloth and paper j and it is as a necessary consequence of the changes that 
have been thus effected, that land and labor have greatly risen in price ; that 
capital abounds and interest is low ; and that she herself feels strong enough 
to set at defiance, as in the case of the Duchies she recently has done, the 
almost united will of Europe. 

Having all these facts before us we are led necessarily to the conclusion 
that, with societies as with individuals, prosperity is far less due to the 
liberality of nature than to the use that is made of the bounties, large or 
small, of which they have been the recipients. The highly-gifted man, head 
of his class, throwing away his time and wasting his talents, dies in poverty, 
despised by all ; while the patient industry of the fellow scholar to whom 
nature had been far less bounteous, enables him to attain to fortune, fame, 
and influence. Precisely so is it with nations, the question of their pros- 
perity or adversity being dependent, mainly, not on the extent of nature's 
gifts, but on the use that is made of those which have been accorded. 

Studying now the several communities above referred to, we find them 
susceptible of being divided into two well-defined classes, one of which, 
embracing Ireland, Turkey, Mexico, Canada, and the South American 
States, exports its products in their rudest state, leaving to others the work 
of changing their forms, and thus fitting them for consumption by the world 
at large. The other, embracing France, Belgium, and the Zoll- Verein, buys 
the raw products of other countries, combines them with those produced at 
home, and sends the two, thus combined, to every market of the world. In 
the first of these the price of land is low, capital is always scarce, and the 
capitalist is master of the laborer, whose condition is little better than that 
of mere hewer of wood and drawer of water for the middleman by whose aid 
he maintains his little commerce with the outer world. 

Looking now homeward we find our Union itself equally susceptible of 
division, the South and West exporting raw produce and paying at the 
highest rate for the use of a very little money ; the North and East mean- 
while buying that produce, changing its form, and returning it to the original 
producers burthened with the heavy charges to which our Eastern friends 
have stood indebted for the large capitals which are always ready to be lent 



5 



at rates of interest that, as I have already said, are moderate by com- 
parison with those of the West and South, though high when compared 
with those of the European States to which reference has above been made. 

Studying all the facts thus presented by so many important communi- 
ties, we are led inevitably to the conclusion that the growth of capital is 
slow, and the price paid for its use high, in the direct ratio of dependence 
on strangers for finishing and distributing the products of the soil; while 
rapid in its growth and declining in its price in the ratio of the increase of 
that national independence which enables each and every nation to exchange 
directly, and without the need of foreign intervention, with each and every 
other. Admitting this, and all experience proves it so to be, then must the 
extent of national resources be mainly dependent upon the policy pursued, 
whether that which tends to promote or to repress the growth of that inde- 
pendence. 

The questions asked by science are, "What are the facts?" and " Why 
are they so ?" The first having above been answered, we come now to the 
second — " Why is it that poverty, high interest, and subjection of the laborer 
to the will of the capitalist are constant attendants of that course of policy 
which tends to limit nations to the two pursuits of labor in the field and 
labor in the shop — trade and agriculture?" To this an answer has recently 
been given by a well-known citizen of your State, one of the clearest-headed 
and most acute of economists, and late State Reporter — one to whom I gladly 
here acknowledge myself to have been indebted for many valuable sugges- 
tions — my friend Mr. Peshine Smith; and so well given that, although yet 
unpublished, I place it here before you, with his permission, in the words 
of his manuscript now in my possession, as follows : — 

" Between the production of any commodity whatsoever, and its consump- 
tion, the interval, long or short, is one of inertness. So long as it so 
remains it stands a monument of human power and natural forces which, 
having expended themselves in bringing it into shape, slumber in suspended 
animation, not only communicating no impulse to that incessant activity which 
is the characteristic of vitality, but actually constituting a clog and obstruc- 
tion that involves a draught upon the vital forces for the work of putting it 
again in motion. It is like an inorganic body contained within, and afflicting, 
an organism. 

" The space to be overcome, and the time that must intervene before, by 
consumption, it evolves utility — thus becoming once again an instrument and 
a force — are co-efficients of its value, neutralizing in the same proportion 
the power of the community in which it so rests paralyzed. The growth of 
wealth, therefore, depends upon the rapidity of the societary circulation; not 
the speed with which products are transported in space, nor the frequency 
with which they pass from hand to hand ; but the continuity of transforma- 
tion through the immediate succession of actual consumption to production. 
This involves necessarily the concentration and interfusion of producers and 
consumers, the growth of wealth, and the diversification of employments." 

Such being the theory, we may now compare it with the actual practice. 



6 



A bushel of wheat is produced representing, let us say, a dollar's worth of 
mental and physical force. The consumer being close at hand, the producer 
re-enters on the instant upon the possession of the whole capital that had 
been expended. Consumers not presenting themselves, the farmer stores it 
in his baru, losing so much interest. A neighbor offers to carry it for him, 
charging interest proportioned to the time that may reasonably be supposed 
likely to elapse before a consumer shall be found. A trader comes, and he 
now takes upon himself the burthen of carrying it, charging further interest. 
In this manner it passes from hand to hand and from city to city, finally 
finding a consumer in Lyons or Manchester, having on the road paid, in the 
mere form of interest, perhaps half the price at which it has at last been 
sold. 

What is true of this single bushel is equally so of the hundreds of 
millions of bushels of wheat, rye, and Indian corn; of the thousands of 
millions of pounds of cotton ; of the hundreds of thousands of hundred- 
weights of pork and beef, rice and tobacco, that are everywhere standing 
in barns, warehouses, wagons, cars, and ships, waiting the arrival of men 
prepared to give in exchange for them cloth, furniture, ploughs, harrows, 
and the thousand other commodities needed by the planters and farmers of 
the land. The whole constitutes a mass of petrified capital to be carried at 
the cost of the producer, and it is within the mark to estimate the amount 
so standing petrified at the present moment at five hundred millions of 
dollars, all of which bears interest. Turn back half a dozen years to the 
period of suspended animation that existed throughout the country before 
the war, and you will see that the amount of dead capital then carried must 
have greatly exceeded even a thousand millions. Can we then wonder at 
the high prices that, notwithstanding the wonderful gold discoveries of 
California and Australia, then were paid for the use of a little money by 
both our farmers and our planters ? As I think, we cannot. 

Let us now suppose that throughout the whole length and breadth of the 
land there had then, on the instant, sprung into existence, side by side with 
the producers, the number of consumers required for making an immediate 
market for the whole of this enormous mass, one offering in exchange personal 
service ; another cottons; a third woollens; a fourth spades and hoes; and so 
on to the end of the chapter of the farmer's needs. At once, and almost as 
by enchantment, as in the case of the bottle of old wine made memorable 
by Webster's exclamation, the interest would have been stopped; the petrified 
capital would have sprung into activity and life ; notes would have been paid ; 
store debts would have been discharged ; and the farmer would have found 
that instead of being dependent on the neighboring usurer for the means 
with which to buy sugar, tea, and coffee, he had in his hands a surplus ready 
to be applied to the purchase of all the machinery required for enabling 
him to double the produce of both his labor and his land. At what now 
might we estimate the gain to the community at large of this economy of 



7 



capital? Most certainly the figure would be twice that of the mere saving 
of the 12, 15, 20, 30, or 40 per cent, to be paid throughout the country, 
and would represent many hundred millions. In the life of nations, as in 
that of individuals, it is thus in the rapidity of circulation and consequent 
economy of labor and interest that we are to find the surest road to wealth 
and power. 

The case here supposed is precisely that exhibited in every country in which 
the consumer and producer are near neighbors to each other. The Southern 
traveller in New England asks, " Where are your barns ?" and finds his 
answer in the fact then given him, that everything yielded by the land is 
consumed on the instant of production. So is it around our cities, the 
market gardener finding instant demand for all his products. So, too, is it 
in Belgium and in France ; and therefore is it, that in those countries capital 
abounds, and that the services of money can always be commanded at the 
lowest rates of interest. 

Whence, however, it will be asked, could have come the vast amount of 
labor required for giving this almost instant life to the enormous amount of 
capital so petrified ? Before answering this question allow me to ask you to 
look to the extraordinary waste of human power that occurs in every country 
of the world in which, by reason of the absence of diversity of employment, 
there exists no regular and steady demand for it. Taking together all the 
countries I have named as exporters of raw products, Kussia, Ireland, 
Canada, Mexico, and South America, it may well be doubted if the 
waste of force amounts to less than five parts out of every six; and yet, 
each and every portion of it represents some certain amount of capital in 
the forms of food, clothing, and shelter, expended for the support of life. 
Each dollar's worth of that capital, aided by the natural forces, is certainly 
capable of producing twice if not even thrice the quantity expended, and 
when it does so the community becomes from day to day more wealthy to 
the extent of the entire difference. When, on the contrary, the services of 
the laborer are not demanded, the community is impoverished to the whole 
extent of the consumption. Such being the case, it is easy to comprehend 
why capital should be scarce and interest high in all the countries that have 
last above been named. 

Between labor and labor's products there exists the important difference, 
that while the latter can be preserved in the interval between production and 
consumption, the former cannot. The owner of capital petrified in the form 
of unconsumed wheat loses only interest; whereas, the owner of uncon- 
sumed labor loses capital, labor power being that one species of it which if 
not consumed at the moment of production is lost forever. The more instant 
the demand for human service, and the more rapid its circulation, the greater 
must therefore be the increase of power and of force, the law governing the 
social body being identical with that which we feel and know to govern the 



8 



ph} 7 sical one, and which is embodied in the wish that "good digestion may 
wait on appetite and health on both." 

The quantity of capital petrified in the form of raw products awaiting re- 
vivification in the years anterior to the war has, as you have seen, been 
estimated at much more than a thousand millions of dollars. Of how it was 
with capital in the form of muscular force we may form some opinion from 
the following passage from a Report of one of your charitable societies, ex- 
hibiting the state of thicgs that here existed in December, 1855, nearly two 
years prior to the occurrence of the great crisis of 1857, as follows : — 

" Up to the present, the Association has relieved 6,622 families, contain- 
ing 26,896 persons, many of whom are families of unemployed mechanics, 
and widows with dependent children, who cannot subsist without aid. And 
as the season advances the amount of destitution will increase. Last winter 
it was three times as great in January as in December, and did not reach 
its height until the close of February." 

This is the type of all the reports that might, in the years that followed, 
have been made throughout the Union. Look where we might, men 
and women were seen unemployed, because mines had been abandoned ; 
furnaces put out of blast ; mills and machine-shops closed ; and farmers de- 
prived of the power to make demand for labor because compelled to choose 
between storing their products on the one hand, or, on the other, selling 
them at the ruinous prices that then prevailed. Taking the whole country 
through, from North to South and from East to West, it may safely be 
asserted that two-thirds of the capital daily invested in the production of 
human force were then being daily wasted. Estimating now the national 
labor power as being equivalent to that of eight millions of men, and the 
power of production of that labor, properly aided by machinery, at but two 
dollars and a half per head, per day, the daily loss would have amounted to 
thirteen millions, or $1,000,000,000 a year. Capital in one form was thus 
being destroyed because other capital was standing petrified in the forms 
of corn, wheat, lumber, rice, and other commodities for which no market 
could be found; and therefore was it that, with the treasures of California 
at our command, money was scarce and high, and public and private credit 
at the lowest ebb. 

Having thus shown what was the waste of interest and of that capital 
which took, necessarily, the form of physical and mental force, we may now 
for a moment look at the waste of things. The straw of France is valued at 
$150,000,000; but throughout the West it is destroyed because of the ab- 
sence of that market for it which arises necessarily in all communities in 
which employment is diversified. The manure of England is valued at 
£100,000,000, and near our cities manure is greatly prized; but throughout 
that portion of the country which sends its products to market in the rudest 
forms there is a constant withdrawal of the elements of fertility, the conse- 
quence of which exhibits itself in a steady decline in the powers of the soil. 



9 



How enormous is the injury thus produced may be judged when it is known 
that more than a dozen years since it was stated, and by high authority, that 
our total annual waste " could not be estimated at less than the equivalent 
of the mineral constituents of fifteen hundred millions of bushels of corn." 
Well might the author of this statement exclaim, that " what with our earth- 
butchery and our prodigality we were every year losing the elements of 
vitality ;" and that although " our country had not yet grown feeble from 
this loss of life-blood, the hour was fixed when, if the existing system were 
continued, the last throb of the nation's heart would have ceased, and when 
America, Greece, and Rome would stand together among the nations of the 
past!" 

The reverse of this is seen in all those countries in which the producer 
and consumer are brought more near together. 

With every stage of progress in that direction, the various utilities of the 
raw materials of the neighborhood become more and more developed ; »nd 
with each the farmer finds an increase of wealth. The new mill requires 
granite, and houses for the workmen require bricks and lumber; and 
now the rock of the mountain side, the clay of the river bottom, and the 
timber with which they have so long been covered, acquire a money value 
in the eyes of all around him. The granite dust of the quarry is found 
useful in his garden, enabling him to furnish cabbages, beans, peas, and the 
smaller fruits for the supply of neighboring workmen. On one hand he 
has a demand for potash, and on another for madder. The woollen manu- 
facturer asks for teazles, and the maker of brooms urges him to extend 
the cultivation of the corn of which the brooms are made. The basket- 
makers, and the gunpowder manufacturers, are rival claimants for the pro- 
duce of his willows; and thus does he find that diversity of employment 
among those around him produces diversity in the demands for his physical 
and intellectual powers, and for the use of the soil at the various seasons of 
the- year; with constant augmentation in the powers of his land and in 
its price. 

Directly the reverse of all this becomes obvious as the consumer is more 
and more removed from the producer, and as the power of association is 
thus diminished. The madder, the teazle, the broom corn, and the osier 
cease to be required; and the granite, clay, and sand continue to remain where 
nature had placed them. The societary circulation declines, and with that 
decline we witness a constantly increasing waste of the powers of man and 
of the great machine given by the Creator for his use. His time is wasted, 
because he has no choice in the employment of his land. He must raise 
wheat, or cotton, or sugar, or some other commodity of which the yield is 
small, and which will, therefore, bear carriage to the distant market. He 
neglects his fruit-trees, and his potatoes are given to the hogs. He wastes 
his rags and his straw, because there is no paper-mill at hand. His forest- 
trees he destroys, that he may obtain a trifle in exchange for the ashes 



10 



they thus are made to yield. His cotton-seed wastes upon the ground, or 
he destroys the fibre of the flax that he may sell the seed. Not only does 
he sell his wheat in a distant market, and thus impoverish his land, but 
so does he also with the very bones of the animals that have been fattened 
with his corn. The yield, therefore, regularly decreases in quantity, with 
constant increase in the risk of danger from changes of the weather, because 
of the necessity for dependence on a single crop; and with equally constant 
diminution in the powers of the man who cultivates it, until at length he 
finds himself a slave not only to nature but to those of his fellow-men. 
whose physical powers are greater than his own. That it is density of 
population that makes the food come from the richer soils and thus enables 
men further to increase their power to command the various forces of nature, 
is a truth evidence of which may be found in every page of history; and 
equally true is it, that in order to the cultivation of those soils there must 
be that development of the latent powers of man which can be found in 
those communities only in which employments are diversified. 

Combining together the various items of waste thus far referred to, we 
obtain an annual amount that counts by thousands of millions of dollars, 
and that well accounts for the fact that capital has here been always scarce 
and interest high ; and that we have been compelled to look abroad for aid 
in the establishment of communications, promising always payment for its 
use at prices ruinously high, and then, when bankruptcy has come, finding 
ourselves compelled to submit to denunciations like the so often quoted one 
of the Kev. Sidney Smith ; and yet, it is only at the threshold of this ques- 
tion of waste at which we have now arrived. 

We have land in abundance without the power properly, or fully, to culti- 
vate it. We have timber in abundance, but need the power required for 
bringing it to market. We have iron ore in abundance, but are deficient 
in power to convert it into axes, ploughs, rails, and engines; and yet in 
our beds of coal, vast beyond those of all Europe combined, we have an 
inexhaustible supply of that material a single bushel of which is capable of 
doing the work of hundreds of men. Why do we not mine it ? Because 
we need the capital required for sinking shafts and purchasing engines; and 
yet, in the period to which I have referred there were more than a thousand 
millions of capital standing petrified at the expense of its producers, and we 
were wasting daily millions of that labor-capital whose application in this 
direction would have added so largely to the national wealth. How wonder- 
ful is the addition that may thus be made has well been shown in the 
results so recently attained in California, and still more recently in the 
oil regions of Pennsylvania and the adjacent States. Greatly more wonder- 
ful than both of these combined must have been the effects that would have 
resulted from the application to the development of our marvellous and 
almost universal resources in coal and ores of even so small a proportion as 
a single fifth of the labor capital that was being wasted on each and every 



11 

day of the sad years to which I have referred— the years in which we paved" 
the way for the leaders of the secession movement. To estimate the annual 
addition that would, in that quarter alone, and by means of that comparatively 
small economy, have been made to the national wealth, at $1,000,000,000, 
would be to remain very far indeed within the truth. 

Failing to develop our mineral wealth we are led necessarily to a waste 
of the mental power for whose development we make such large expenditures 
on schools and colleges. Among the seven and thirty millions of whom the 
population of the Union is now composed, the variety of minds is on a par 
with the variety of faces, each and every one being better suited for some 
one occupation than for any other. To enable each to find that place in which 
he may most fully contribute to the growth of wealth and power, and to 
the promotion of the societary interests, there needs to be that diversification 
of pursuits which never can arise in a country that exports its products in 
the rudest state. In all such countries, the round man finds himself placed 
in the square hole, and the square man in the round one, each thus de- 
prived of power to contribute his proper share to the advancement of the 
community of which he is a part. More than at almost any period of our 
history was this to be seen at the period of which I speak; and, as a neces- 
sary consequence, the proportion borne by non- producers, middlemen of every 
description, to producers was greater than in probably any other country 
claiming to rank as civilized. For want of the capital that then re- 
mained inert and useless, bearing interest at the cost of its producers, the 
mill, the mine, and the furnace were closed, and those who should have 
been furnishing for consumption all the various products of the earth found 
themselves compelled to become clerks and traders, lawyers and doctors, the 
claimants on the things produced thus increasing in number precisely as 
production diminished. 

The power of accumulation, whether in the physical or social body, exists 
in the ratio of the rapidity of circulation. The circulation at the time of 
which I speak was sluggish in the extreme, and hence it was that, notwith- 
standing the vast receipts from California mines, capital was petrified, credit 
was impaired, and the rate of interest throughout the West great, as I believe, 
beyond all previous precedent. In the history of the civilized world there 
can, as I think, be found no parallel to the waste of physical and mental 
force that then was taking place. Seeing this, I then often told my friends 
that the tariff of 1846 was costing the country not less than $3,000,000,000 a 
year, but am now satisfied that I should have been 'much nearer the truth 
had I placed it at double that amount. 

That waste, so far particularly as the 20.000,000 of the population of 
the Free States were concerned, was at its height throughout the whole 
period of Mr. Buchanan's administration. For the products of their agri- 
culture there was almost literally no demand among the manufacturing 
nations of Europe, our exports of food in that direction in the three years 



12 



that preceded the secession movement having averaged but $10,000,000. 
Corn in the West was then being used for fuel, and thus was its producer 
compelled to lose not only the interest upon his capital, but the very capital 
itself that he had thus invested. Labor power was in excess, and men were 
everywhere wandering in search of such employment as would enable them 
to purchase food. Mills and furnaces were abandoned, and so trivial was 
the domestic intercourse that the stock of a number of the most important 
roads of the country fell to, and long remained at, an average price of less 
than fifty per cent. For years we had been trying the experiment as to 
how large the outlay of labor could be made for the accomplishment of any 
given result, an experiment directly the opposite of that which is tried by 
every successful producer of corn or cotton, cloth or iron ; the effect exhibit- 
ing itself in the fact, that the community was paralyzed, and so wholly desti- 
tute of force that had the government then found occasion to call upon 
the whole 32,000,000 for a sum so small as even a single hundred millions, 
it could scarcely have at all been furnished. 

Nevertheless, hardly had Mr. Buchanan left the seat of government 
when three-fifths of the nation, numbering but 20,000,000, commenced the 
erection of the grandest monument the world has ever seen; one that during 
the whole five years that have since elapsed has, on an average, required the 
services of more than a million of men, or more than five per cent, of 
the total population, male and female, sick and well, young and old. Not 
only have those services been given, but during all that time the men em- 
ployed have been well clothed, abundantly fed, and furnished with transpor- 
tation to an extent, and in a perfection, unparalleled in the history of the 
world. With them, too, have been carried all the materials required for 
making the edifice in whose construction they were engaged as durable as 
we know to have been the great pyramids erected by Egyptian monarchs. 
A wonderful work was it to undertake. More wonderful is it to see that it 
has been so soon and so well accomplished, to stand in all the future as the 
monument par excellence of human power. 

Whence came the extraordinary force that we see to have been thus ex- 
erted? How was it that a people which in 1860 had been so very feeble could 
in the succeeding years have made donations to the extraordinary extent of a 
thousand millions of dollars a year ? The answer to this question is found 
in the fact that the conditions of national existence had wholly changed, 
activity and life having succeeded to paralysis, and the societary circulation 
having become strong and vigorous to an extent that had never before in any 
community been known. For the first time there was presented for exami- 
nation a nation in which the demand for labor and all its products went 
ahead of the supply, enabling both farmer and planter to " stop the in- 
terest" upon capital that had so long been petrified in the crudest forms of 
agricultural production, and thus to enable them to make demand for the 
products of other labor applied to the development of our mineral wealth, 



13 



and to the conversion into commodities fitted for hitman use, of the products 
of our hills and valleys, our farms and mines. The secret, gentlemen, of 
all the force that recently has been so well exerted — a force so extraordinary 
as to have astonished the world at large— is to be found in that simple 
principle to which I already have referred, evidence of whose truth is found 
in the books of every trader of your great city, and which is found embodied 
in words already given — the power of accumulation exists in the ratio of the 
rapidity of circulation. 

What, however, was the force applied? Why was it that activity had so 
instantaneously succeeded to apathy—that life and energy had replaced the 
paralysis that had till then existed? Had these questions been put a year 
since, nine-tenths of our people would have said that it had been caused by 
the demands of the government and must terminate with their cessation ; 
and yet, of all the vast body of men who might thus have answered there 
could not have been found even a single one who could have explained how 
the abstraction from other pursuits of the labor of a million of men, and 
the necessity for feeding and clothing them while engaged in the erection of 
such a monument as that of which I have spoken, could, by any possibility, 
have produced the extraordinary effects that have been here observed. 

To attribute the activity and life then existing to the government demands 
is to substitute effect for cause. It was the force resulting from an activity 
of circulation wholly unprecedented in history that enabled the government 
to make the war, and that force existed in despite, and not as a consequence, 
of governmental necessities. That such was certainly the fact will, as I 
think, be clearly obvious when you shall reflect, that but for those necessities 
the whole million of men employed in building our great monument might 
have been employed in clearing land; sinking shafts; mining coal and ores 
and combining the two in the forms of lead, copper, and iron; making bricks 
and lumber; and thus furnishing supplies of raw materials to be converted on 
the spot into thousands of mills and shops, large and small, and into the cloth 
and iron, spades and shovels, coats and hats, required for supplying a popula- 
tion among whom the demand for mental and physical force so far exceeded 
the supply as to make it absolutely necessary to build engines by tens of 
thousands, and thus to substitute, to the annual extent of the power of tens 
of millions of men, the wonderful force of steam for that of the human arm. 
So applied, that same force would have produced annually of commodities 
in excess of what has been our actual production, at least $3,000,000,000, 
every portion of which would have been in the market seeking to purchase 
labor, thus greatly increasing the laborer's reward. The power of accumu- 
lation would, under such circumstances, have been more than trebly great, 
with steady decline in the rate of interest, and in the power of the capitalist 
to control the laborer's movements; freedom, wealth, power, and civilization, 
always growing with the growth of power to place the consumer by the side 
of the producer, and thus to increase the rapidity of the societary circulation. 



14 



That the wonderful activity of that circulation did not result from the 
necessities of the Government will, as I think, be clear to all who carefully 
reflect on the facts above presented. Whence, then, came it ? From the 
adoption at Chicago, six years since, by the great Republican party, of a 
resolution to the effect that the produce of the farm should no longer be 
compelled to remain inert and losing interest while waiting demand in distant 
markets ; that the capital which daily took the form of labor power should 
no longer be allowed to go to waste; that the fuel which underlies our 
soil should no longer there remain to be a mere support for foreign rails; 
that the power which lay then petrified in the form of coal should everywhere 
be brought to aid the human arm ; that our vast deposits of iron ore should 
be made to take the form of engines and other machinery to be used as 
substitutes for mere muscular force ; and that all our wonderful resources, 
material and moral, must and should be at once developed. Such, gen- 
tlemen, was the intent and meaning of the brief resolution 'then and there 
adopted, to be at the earliest practicable moment ratified by Congress, as 
proved to be the case when the Morrill Tariff, on the memorable 2d of March, 
1861, was made the law of the land. To that law, aided as it was by the 
admirable action of the Treasury in supplying machinery of circulation, we 
stand now indebted for the fact that we have, in the short space of five years, 
and at a cost of thousands of millions of dollars, erected the wonderful 
monument of which I have spoken ; that we have, in those same years, 
produced more food, built more houses and mills, opened more mines, con- 
structed more roads than ever before; and so greatly added to the wealth 
of the country that the property of the loyal States would this day ex- 
change for twice the quantity of gold than could five years since have been 
obtained for all the real and personal property, southern chattels excepted, 
of the whole of the States and territories of which the Union stands com- 
posed. 

The view thus presented of our power of accumulation throughout the 
period of Mr. Lincoln's administration differs widely from that which com- 
monly is entertained; and yet, when you shall have reflected upon the facts 
which I shall now present, you will, as I feel assured, agree with me in the 
belief that it has not been overrated. It is probably true, as is so fre- 
quently asserted, that less than the average number of city houses has been 
built, but the growth of towns and villages in your vicinity has been great 
beyond all former precedent. Look, however, to the coal and iron regions 
— to the oil region of the Ohio and its tributaries — and to the wonderful 
mineral one beyond the Mississippi, and you will find that there have been 
there created homes for millions of men, their wives and children. Little 
cotton machinery, it is true, has recently been built, but you have more than 
doubled your power to produce both wool and woollen cloth. Rolling mills 
now exist capable of furnishing annually 750.000 tons of bars, while the 
power by means of which those bars are to be converted into ships, engines, 



15 



and other machinery of transportation and production has more than 
doubled, and has, probably, even trebled. Factories have been created 
capable of supplying almost the world's demand for various instruments of 
production or defence ; sewing machines on the one hand, pistols, rifles, and 
Parrott guns on the other. The quartz mills have been created to which 
we are now, as we are assured, to look for an immediate production of the 
precious metals to the annual extent of $200,000,000. For every engine five 
years since there are now, as I think, more than three at work. Throughout 
the vast fields of the west machines are everywhere doing the work that 
five years since was done by human hands. Fewer miles of railroad may 
have been constructed, but the rolling stock of all has been so much in- 
creased that the power of transportation throughout the loyal States has . 
more than doubled. St. Louis presents to-day, as we are told, an amount 
of steam tonnage two-fifths greater than there existed before the war; and 
yet, so great has been the quantity of produce seeking to go to market that 
the Pennsylvania Central, at Pittsburg, within the present month, has 
been blocked by 2500 loaded cars, for the movement of which no power 
could be supplied. Look, then, in what direction we may, whether to the 
greater or smaller machinery of production, we witness an increase of 
quantity so great as fully to warrant us in the belief that, leaving wholly 
out of view the sums invested in loans to cities, counties, States, and to the 
general government, at no period has the power of accumulation been much 
more than half as great as it has been shown to be in the years of the great 
war that has now so happily terminated. 

Adding together the capital that was only paralyzed to that which was 
absolutely wasted in the period of Mr. Buchanan's administration, we obtain 
an amount thrice greater than would, had it been so applied, have built 
and stocked as many mills as are in all Great Britain employed in the 
conversion of wool and cotton into cloth — as many furnaces as there are 
occupied in converting coal and ore into lead, copper, and iron — and as 
many mills as are now engaged in producing bars; to sink as many 
shafts as would have been required for giving to human labor all the aid 
that there is seen to result from a consumption of coal which is said to 
furnish power to an extent equivalent to that of six hundred millions of 
men ; and to double the quantity and money value of our various products, 
to the great advantage of all our people, borrowers and lenders, employers 
and workmen, traders and manufacturers, builders of railroads and owners 
of ships, there being a perfect harmony of all real and permanent interests. A 
part, and but a small part, of that capital has, by means of a National Free 
Trade System, since been saved ; and it is out of the saving that has thus 
been brought about that we have been enabled to give to the great work 
above referred to labor and commodities equal in their annual money value 
to the vast sum of $1,000,000,000. 

In proof of the accuracy of the views above presented, I propose now to 



16 



offer for your consideration a very brief review of our industrial history for 
the last half century, as follows : — 

Half a century since, the second war with Great Britain came to a close, 
leaving our people well provided with mills and furnaces, all of which were 
actively engaged in making demand for labor and raw materials of every 
kind. Money was then abundant, labor was in demand, wages were high, 
and the public debt was trivial in amount. 

Two years later came the system which looked to increasing our depend- 
ence on foreign markets and known as the British Free Trade one, and at 
once all was changed. Mills and furnaces were closed; labor ceased to be in 
demand; and poor-houses were everywhere filled. Money becoming scarce 
and interest high, land declined to a third of its previous price. Banks 
stopped payment. The sheriff everywhere found full demand for all his 
time, and mortgagees entered everywhere into possession. The rich were 
made richer, but the farmer and the mechanic, and all but the very rich, 
were ruined. Trivial as were then the expenses of the Government, the 
Treasury could not meet them. Such was the state of things that induced 
General Jackson to ask the question, " Where has the American farmer a 
market for his surplus produce?'' The answer thereto, as given by himself, 
is so applicable to the present time that I give it here as proper to be read, 
daily and weekly, by every lover of his country throughout the Union : — 

" Except for cotton, he has neither a foreign nor a home market. Does 
not this clearly prove, when there is no market either at home or abroad, 
that there is too much labor employed in agriculture, and that the channels 
of labor should be multiplied ? Common sense at once points out the 
remedy. Draw from agriculture the superabundant labor, employ it in 
mechanism and manufacture, thereby creating a home market for your 
breadstuff's, and distributing labor to a most profitable account, and benefits 
to the country will result. Take from agriculture in the United States six 
hundred thousand men, women, and children, and you at once give a home 
market for more breadstuff's than all Europe now furnishes us. In short, 
we have been too long subject to the policy of the British merchants. 
It is time we should become a little more Americanized, and, instead of 
feeding the paupers and laborers of Europe, feed our own, or else in a short 
time, by continuing our present policy, we shall become paupers ourselves." 

To the state of things here described were we, in 1828, indebted for the 
first adoption of a National Free Trade System. Almost from the moment 
of the passage of the tariff act of that year, activity and life took place 
of the palsy that previously had existed. Furnaces and mills were built ; 
labor came into demand; immigration increased, and so large became the 
demand for the products of the farm that our markets scarcely felt the 
effect of changes which then occurred in that of England ; the public revenue 
grew with such rapidity that it became necessary to exempt from duty tea, 
coffee, and many other articles; and the public debt was finally extin- 
guished. 



The history of the world to that moment presents no case of prosperity so 
universal as that which here existed at the date of the repeal of the great 
national tariff of 1828. Had it been maintained in existence, not only 
should we have had no secession war, but at this hour the South would 
exhibit a state of society in which the landowners had become rich while 
their slaves had been gradually becoming free, with profit to themselves, 
to their owners, and to the nation at large. It was, however, by successive 
stages, repealed in 1834, 1836, and following years, that repeal being 
accompanied by a constant succession of free trade crises, the whole 
ending in 1842 in a state of things directly the reverse of that above de- 
scribed. Mills and furnaces were closed ; mechanics were starving; money 
was scarce and dear; land had fallen to half its previous price; the sheriff 
was everywhere at work ; banks were in a state of suspension ; States repu- 
diated payment of their debts; the Treasury, unable to borrow at home even 
a siugle million at any rate of interest, was compelled to solicit credit at the 
doors of all the great banking houses of Europe, and to submit to finding 
that credit denied; and bankruptcy among merchants and traders was so 
universal that Congress found itself compelled soon after to pass a bankrupt 
law.* 

Again, and for the third time, was the National System restored by the 
passage of the Tariff Act of 1842. Under it, in less than five years, the 
production of iron rose from 220,000 to 800,000 tons; and so universal be- 
came the prosperity that, large as was the increase, it was wholly insufficient 
to meet the great demand. Mines were everywhere being sunk. Mills were 
everywhere being built. Money was so abundant and cheap that the sheriff 
found but little work to do. Public and private revenues were great be- 
yond all previous precedent, and throughout the land there reigned a pros- 
perity more universal than had, in the whole history of the world, ever 
before been known. 

Once more, in 1846, however, did the Serpent — properly represented on 
that occasion by British free traders — make his way into Paradise, and now 
a dozen years elapsed in the course of which, notwithstanding the discovery 

* On the 12th of January, 1843, Mr. Walter Forward, then Secretary of the 
Treasury, reported to Congress the result of negotiations for a loan of $3,500,000 ; 
which negotiations were begun in April, 1842. But two bids had been made for 
this loan, one of 50,000 and one of 60,000 dollars ; both at 96 per cent., for a six 
per cent, twenty years' stock. The Secretary in a special report to Congress said : 
" The repeated failures incurred in negotiating at home upon advantageous or 
creditable terms suggested the policy of sending an agent abroad for the purpose 
of endeavoring to effect a favorable negotiation in England or upon the Continent. 
Accordingly, a gentleman of the highest consideration for intelligence and integrity 
was selected for the purpose, and left the United States in July last. I regret to 
communicate that he has since returned without effecting the object of his mis- 
sion." — iV. A. Review, Jan., 1865. 



18 



of California mines, money commanded a rate of interest higher, as I be- 
lieve, than had ever been known in the country for so long a period of time. 
British iron and cloth came in and gold went out, and with each successive 
day the dependence of our farmers on foreign markets became more com- 
plete. With 1857 came the culmination of the system, merchants and 
manufacturers being ruined ; banks being compelled to suspend payment ; 
and the treasury being reduced to a condition of bankruptcy nearly approach- 
ing that which had existed at the close of the free trade periods commenc- 
ing in 1817 and 1834. In the three years that followed labor was every- 
where in excess ; wages were low ; immigration fell below the point at which 
it had stood twenty years before; the home market for food diminished, 
and the foreign one proved so utterly worthless that the annual export to all 
the manufacturing nations of Europe, as has been already shown, amounted 
to but little more than 810,000,000. 

Why was this? Why had not the foreign demand for fcnd grown with 
the growth of our dependence on foreigners for cloth and iron ? Because 
the British Free Trade System is in truth and in fact a monopoly one ! Be- 
cause it is based on the idea of stimulating competition for the sale of labor 
and thus enslaving the laborer; stimulating competition for the sale of 
the fruits of the earth, and thus enslaving every community that refuses to 
resist it !* At the moment of which I speak, notwithstanding the vast sup- 
plies of Californian and Australian gold, the money value of British labor 
had, on the average, scarcely at all increased, while foreign competition for 
the supply of food to the diminutive British market had reduced its price 
to a lower point than, as I believe, it had reached for half a century before. 

The rebellion came, finding our people unemployed, public and private 
revenues declining, the Treasury empty, and the public credit greatly impaired. 
With it, however, came the power once again, and for the fourth time, to 
obtain a re-establishment of that National System required for protection 
of the men who had food and labor for which they needed to find a market. 
That protection has now endured for less than five years, and yet, as has 
been shown, so marvellous have been its effects that while it has enabled us 
to give to the government four thousand millions of dollars, it has so largely 
added to the value of land and labor that, notwithstanding the destruction 
of property in the South, the nation, as a whole, is this day almost twice as 
rich as it had been before. 

* Of the amount paid by the British people for sugar, tea, coffee, and tobacco, 
not even one-eighth part reaches the poor people who produce those articles. The 
other seven-eighths are divided between the government and the middlemen, the 
former taking little short of a hundred millions of dollars. This it is that is called 
free trade ! Under it the producer of cloth finds himself deprived of the power to 
buy sugar, while the sugar producer goes naked because unable to buy himself a 
shirt. 



19 



The history of the period thus reviewed may now more briefly thus be 
stated : — 



The National Free Trade System, 
as established in 1813, 1828, 1842, 
gave, as that of 1861 is now prepared 
to give, to its British Monopoly suc- 
cessor — 

Great demand for labor. 

Wages high and money cheap. 
Public and private revenues large. 

Immigration great, and steadily in- 
creasing. 

Public and private prosperity great 
beyond all previous precedent. 
Growing national independence. 



The British Monopoly System, as 
established in 1817, 183*4,. 1816, and 
1857, bequeathed to its successor — 

Labor everywhere seeking to be em- 
ployed. 

Wages low and money high. 
Public and private revenues small, 
and steadily decreasing. 
Immigration declining. 

Public and private bankruptcy near- 
ly universal. 

Growing national dependence. 



Such is the history of the past. Let our people study it and they will, 
as I think, understand the causes of the prosperity of the present. That 
done, let them determine for themselves whether to go forward in the direc- 
tion of individual and national independence, or in that of growing dependence, 
both national and individual. 

The Trader who studies it can scarcely fail to see, that the more active 
the capital of the country, the greater the variety of pursuits, and the 
greater the demand for human service, the larger must be production; the 
greater must be the quantity of things to be exchanged ; the less must be 
the necessity for resorting to trade as affording almost the only means of 
support; the less must be the competition among traders themselves; and 
the greater the probability of his securing independence for his children 
and himself. 

The Merchant can scarcely fail to see, that the greater the diversification 
of pursuits among our people, and the more we finish our products so as to 
fit them for consumption, the greater must be the variety of commodities 
with which to supply the world; the greater our demand for the products 
of distant countries; and the more numerous the markets open to his opera- 
tions whether as a seller or a buyer. 

The Shipowner can scarcely fail to see — 

I. That the larger the demand for labor the greater must be the immigra- 
tion of men who have labor to sell, and the greater the demand for ships : 

II. That the more active the capital of the country the lower must be the 
average rate of interest, and the greater his power to compete with owners 
of foreign ships: 

III. That the more active that capital the more numerous will be the 
finished commodities to be carried abroad; the greater the number of mar- 
kets to which he can send his ships; and the greater the demand for sugar, 



20 



tea, coffee, and raw materials of manufactures, products of countries which 
have no ships: 

IV. That, on the contrary, the more sluggish that capital the higher must 
be the rate, of interest; the more must we be limited to the export of raw 
produce; the fewer must be our markets; and the more must he find himself 
compelled to compete with the low rates of interest, and the low wages paid 
by owners of British and German ships : 

V. That since the introduction of steam the question of navigation has 
become, and must from day to day more become, a mere question of the 
rate at which capital can be supplied ; and, that if we are ever to resume 
upon the ocean the place so lately occupied, it can be only as a consequence 
of the pursuit of a policy tending towards bringing the consumer and the 
producer together, thereby quickening the motion of capital in the forms of 
food and of mental and muscular force, and thus promoting accumulation. 

The Railroad King can scarcely fail to see— 

I. That the more rapid the societary circulation the greater must be the 
quantity of men and things needing to be carried : 

II. That the more rapid the development of our great mineral deposits, 
the greater must become the general supply of iron, and the more the 
tendency to a fall in price : 

III. That all experience tends to furnish evidence of the facts, that 
foreign iron is always low in price when American iron masters are prosper- 
ous, and always high when American furnaces are out of blast: 

IV. That, as a consequence, American railroads have always prospered 
when the internal commerce was rapidly growing; and have been always 
greatly depressed when in obedience to the orders of foreign traders that 
commerce has been sacrificed. 

The Landowner can scarcely fail to see, that when capital is active 
interest is low and labor is in great demand; and that then it is that foreign 
capital and foreign labor tend, to his great advantage, here to seek em- 
ployment. 

The Farmer can scarcely fail to see, that the greater the home consump- 
tion of his products the less must he be compelled to compete in England 
with the agricultural nations of Europe ; the higher must be prices in that 
regulating market; and the higher must be those of the great domestic one. 

The Manufacturer of the East can scarcely fail to see, that the more 
our mineral resources are developed, and the more the people of the South 
and West give themselves to the production of the coarser kinds of cloth, 
the greater must be the demand upon himself for those more profitable of a 
higher order. 

The Banker can scarcely fail to see, that all our financial crises, and all 
the losses thence resulting, have occurred in British free trade times; and 
that all that is needed for securing us against their recurrence in the future, 
is the thorough adoption of a policy tending to promote rapidity in the socie- 
tary circulation. 



21 



. The Philanthropist can scarcely fail to see, that the more rapid that 
circulation the greater must be the tendency towards improvement in the 
condition of the laborer, black or white. 

The Finance Minister can scarcely fail to see, that the power perma- 
nently to contribute to the support of government has always existed, and 
must necessarily exist, in the direct ratio of the rapidity of the circulation. 

The Bondholder can scarcely fail to see, that repudiation has always 
come as a consequence of an arrest of the circulation, and that perfect 
security for his children and himself can be found in one direction, and one 
alone ; that which leads to more perfect combination among our people as a 
consequence of bringing the consumer and producer more and more near 
together. 

The Economist can scarcely fail to see, that the British free trader seeks 
to place himself between all the producers and consumers of the world, and 
to enrich himself at their expense; and that the real road to national wealth 
and power lies in the direction of resistance to that system. 

The Statesman can scarcely fail to see, that our periods of national 
weakness have been always those in which consumers and producers have 
been becoming more widely separated, while our periods of strength have 
been those in which we have had a National System ; as when, thirty years 
since, by aid of the tariff of 1828, we finally extinguished the national debt; 
as when twenty years since, by aid of the tariff of 1842, we resumed the 
payment of interest on our foreign debt; and as now, when we have just 
completed the erection of the greatest and most costly monument the world 
has ever seen, or perhaps will ever see. 

The man in whom there exists any feeling of national pirde can hardly 
fail to see, that the one great obstacle standing in the way of the permanent 
establishment of a sound National System has been the opposition of foreign- 
ers, and of that people especially which has recently been most active and 
most untiring in its effort to aid the South in breaking up the Union. 

The whole people can scarcely fail to see, that human force, mental 
and muscular, is the commodity which all have to sell; that it exhausts itself 
on the instant of production; that the more instant the demand for it the 
more is it economized, the greater is the power of production, the higher the 
rate of wages, the greater the power of accumulation, the lower the rate of 
interest, and the greater the tendency towards freedom and peace, both at 
home and abroad. 

The Christian can scarcely fail to see, that the policy which tends 
towards increase in the rapidity of circulation tends necessarily towards 
increasing the reward of labor and effecting an improvement in the condition, 
material and moral, of the laborer; and that in advocating it he is aiding 
towards carrying into practical effect the great precept which lies at the 
foundation of Christianity, all things whatsoever ye would that men 



22 



The views thus presented differ widely from those taught to the world 
by that English school which holds that " the smuggler is the great reformer 
of the age j" and by those of its disciples who have recently throughout our 
southern coast carried their theories into practical effect. The cause of 
difference is to be found in this, that while the policy urged by it upon the 
outer world is directly the reverse of what is practised by every Manchester 
manufacturer, that National Free Trade policy to which we owe our recent 
great success and our present prosperity is in full accordance with the 
practice of every successful mechanic, manufacturer, and agriculturist 
throughout the civilized world. What is it that these latter desire ? Is it 
not to economize human service ? To that end are they not profuse in the 
application of food and clothing to the creation of machinery, thereby 
substituting the products of labor and capital for labor itself? Does not 
capital everywhere grow in the direct ratio of that substitution, and does 
not that growth make new demands for human labor, with constant tendency 
towards increased production, increase of wages, and increased ability to 
make still further substitution of capital for labor? To these questions 
there can be no reply but in the affirmative. 

Nevertheless, when we study the writings of British economists, we find 
them filled with advice in reference to the saving of products in the form of 
money, leaving wholly out of view that labor is economized in the direct 
ratio of the rapid consumption of its products. Say to them that the waste 
labor of Ireland in a single year would more than suffice to give to the 
Irish nation mills and machinery for the conversion of all the cotton pro- 
duced in America, and they reply by saying, that Manchester furnishes 
shirts to the Irish laborer more cheaply than could be done by men who 
should employ Irish labor and Irish fuel in making cloth for Irish wear. 
Prove to them, on the highest free trade authority, that in those parts of 
Russia in which employments are not diversified the condition of the free 
laborer is worse than that of the serf, and they ask your attention to the 
low price at which they supply coats and hats. Show them, as I myself did, 
some years since, to Mr. Cobden, that we were steadily giving more and 
more food and cotton in exchange for less and less gold, tin, copper, and 
iron, and they will reply, as he did to me, by asking, "Do we not now furnish 
iron cheaply enough to satisfy you V 

Talk with an American disciple of that school, of the pauperism that has 
always here existed in the British Monopoly times, and he replies, as recently 
was done by one of your own high authorities, by exhibits of the high prices 
of steel pens ! Tell him that of all labor-saving machinery the precious 
metals are the greatest, and then invite his attention to the enormous rate 
paid for their use throughout the whole period of Mr. Buchanan's adminis- 
tration, and he will be likely to answer by showing at how low a price Britain 
had been willing to supply with cloth people who, unable to sell their labor, 
could scarcely purchase food ! Need we then wonder that by that school the 



23 



field of economical science has recently been so reduced in its proportions 
that it is now limited to the consideration of the mere acts of buying 
cheaply and selling dearly, having thus become a sort of shopkeeping 
science, the natural product of a policy that so long has tended, to use the 
words of Adam Smith, to the creation of a " nation of mere shopkeepers"? 
Scarcely so, as I think. 

The one commodity, as we know, that all men have to sell is muscular 
and mental force, and that must be sold on the instant, or it is forever lost. 
The Irish people, on an average, waste nine-tenths of it, and while they shall 
continue so to do Ireland must remain in the pitiable condition in which 
she stands now before the world. Under the administration of Mr. Bu- 
chanan two-thirds of it were wasted here, and to that waste were we indebted 
for the pauperism of our people and the weakness of the government five 
years since. To the economy of it that resulted from the adoption of a 
National Free Trade System, and to that alone, do we stand to-day indebted 
for the wonderful changes we since have seen ; and yet, strange to say, you 
have among you men of both intelligence and influence who are urging upon 
the country a return to that British Monopoly System which, under the mask 
of free trade, has not only paralyzed us on every occasion on which we 
have been subjected to it, but has ruined every friend that Britain has ever 
had, and every country that she has so long controlled as to give to it 
opportunity for proving the full extent of its capacity for mischief. 

The world has been always word-governed, and so is it now, the word 
most in use for that purpose being that to which reference has above been 
made, to wit, "free trade." Such being the case, it may not be amiss 
here to inquire what it is that, as used, it really means. To that end let 
us examine the movements of the people here around us, and ascertain 
who among them it is that enjoy the most perfect freedom of trade; thus, 
in accordance with the true method of science, studying the near with a 
view to proper comprehension of the distant. Doing this, we shall be sure 
to find it among those who have the most direct relation with the con- 
sumers of their products. Take, for instance, the Times, Tribune, Herald, 
and Post, and see how entirely impossible it would be for any person, or 
persons, in any manner to control, to his own profit, their course of action. 
Ask their editors, and you will soon learn how fully they appreciate the 
fact that their success in the present and in the future is dependent wholly 
on themselves, and cannot be seriously affected by any outside action. Re- 
tailing the services of their journals, and the journal itself, their owners 
suffer little, if at all, at a time of crisis, nor do they ever figure among 
the creditors of bankrupts. Look, I pray you, throughout your city and 
see if you can elsewhere find any producing interest that is so entirely inde- 
pendent. As I think you cannot. 

Take next those printers who, like the Messrs. Harper, make and sell 
their own books, and you will find a state of things precisely similar. 



24 



All that they need, as they well know, is good judgment in the selection of 
books, good taste in their manufacture, and sound discretion in the mode of 
bringing them to the knowledge and within the reach of the public. 

Compare now with them the printer who works for publishers, the maker 
of printing paper, or the binder of books, and you will find a state of things 
most widely different. Perfectly familiar, throughout a large portion of my 
life, with everything connected with both paper and books, I« can safely say 
that I know of scarcely any pursuits in which those engaged have been more 
dependent on the will of others, in which so few have accumulated fortunes, 
or in which there has existed less real freedom of trade. To what now is 
this to be attributed? To the simple fact that all the products of the 
labors of these men are required to pass through the hands of middle-men 
before they can reach the public. In common with all others, those middle- 
men rejoice when the demand for paper diminishes; when the raw materials 
of books accumulate; and when the necessities of their producers force 
them to sell at prices that yield no profit, and at credits so prolonged as to 
involve in risk of ruin all who are compelled to give them. The nearest 
approach to serfdom that I know to exist in civilized life is that of the men 
who are engaged in departments of manufacture whose products have yet 
to pass through several hands before they can reach those of the consumer. 

Precisely so is it with nations. France finishes all her products, combin- 
ing food, wool, and silk, and enabling the compounds readily to reach every 
country, every city, and every village of the world. Of all countries there 
is, therefore, none so independent. Hostile tariffs scarcely at all affect her 
commerce. Short crops, or wars abroad, affect her least; and for the reasons 
that her market is everywhere, and that such occurrences in one country 
find, to a great extent, their compensations in another. Her position in 
relation to the world at large is, therefore, precisely that of the proprietors 
of your journals. So long as both shall continue to furnish commodities 
better fitted than any other to meet the wants, or to gratify the tastes, of 
consumers, no laws that can be anywhere enacted can prevent them from 
supplying their accustomed markets. 

Directly the reverse of this is what we find in those countries which ex- 
port raw products. For them there is no market except in those countries 
which possess machinery of manufacture, wheat not being needed where there 
are no flour mills, nor cotton where there is none of the machinery required 
for spinning and weaving it. They must go where they can, and not where 
they would, their position being, therefore, precisely that of the printers and 
paper-makers above described. Thus limited in their markets they find 
themselves subjected to the will of those by whom these latter are controlled, 
by all of whom it is well known that the way to cheapen the commodities 
they need to purchase is to be found in working short time, diminishing 
the supply of money, and raising the rate of interest. In this manner are 
the people of all the countries that export raw produce kept in a state of 



25 



dependence and made mere " hewers of wood and drawers of water" for men 
whose profits grow as theirs decline; and this is urged upon them by England 
as being a real freedom of tradti The day may come, and I cannot but hope 
that it soon will do so, when it shall be understood that its real meaning is 
monopoly ; that the real free traders are those who advocate the National 
Free Trade System j that the road to civilization lies in the direction of that 
diversified industry which tends to bring the consumers into close relation 
with the producers ; and that the raising of raw products for the supply of 
foreign markets is the proper employment of the barbarian and the slave, 
and of those alone. 

Of all the communities that have at any time existed none has ever had 
in its hands so much power for good or evil as now is held by the one of 
which we are a part. With natural resources great almost beyond imagina- 
tion we need only the labor and the capital required for their full develop- 
ment. For the one we do not need to look beyond those vast deposits of 
petrified power which lie beneath the soil, a single bushel taken from which 
is capable of doing the work of hundreds of men. Of the other the supply 
will be found in vast abundance whenever the nation shall come to learn, 
first, that corn and cotton unconsumed are so much dormant capital waiting- 
only consumption to spring once again into activity and life; and, second, 
that labor power, mental and muscular, is so much capital that perishes on 
the instant of its production, and if not then consumed is lost forever. 

We do not, therefore, need to seek abroad supplies of either capital or 
labor. Both, however, abound in various countries of Europe, and have 
always proved ready to come to us when we have pursued a policy tending 
to economize labor, to increase the supply of capital, and thus to lower the 
rate of interest — the immigration of both having largely grown under the 
National Free Trade policy of 1828, 1842, and 1861; and that of both 
having declined under the British Monopoly System established by the tariffs 
of 1834, 1846, and 1857. The more productive labor here the greater 
then must be the tendency towards emigration from Europe, and towards 
elevation of the laborer there. The greater the accumulation of capital and 
the more perfect the national and individual credit here, the greater must be 
the tendency towards export of European capital, and reduction of the rate of 
interest here. For the production of such results, beneficial to the world at 
large, we need but steadily to pursue that course which most stimulates the 
societary circulation; that one which tends most to enable the farmer and 
the planter to " stop the interest" on their products, and the laborer to find 
instant demand for the power he has to sell. 

Such are our resources. Infinite in their extent, it is to their develop- 
ment thus far accomplished under the National Free Trade System that 
we have been indebted for our passage through a trial extraordinary far 
beyond any to which any nation of the world had before been subjected. The 
work, however, has but just begun. Let us continue onward in the same 



26 



direction, and we shall find that the capital invested in the great monument 
of which I have spoken has proved as good an investment as that of the 
New York canals, the result of its erection having been that of giving to 
the loyal states the power to make themselves, and for the first time, really 
independent; as has already been the case to an extent that five years since 
could not have been anticipated. Let us so continue, and we shall find 
that the annual addition to the national capital, by means of labor and in- 
terest saved by individuals, will soon be fifty-fold greater than the amount 
of interest required to be paid from the treasury of the Government by 
which those individuals are represented. 

In conclusion, allow me now to ask your attention to the great fact that 
commercial power has always gone hand in hand with that diversification of 
pursuits which has everywhere resulted from measures tending to the pro- 
motion of internal commerce. Athens, with her miners and manufac- 
turers, governed the Grecian world. Carthage, largely manufacturing, 
controlled the commerce of half the then known world. Holland was mis- 
tress of the commercial world in those days when the people of the Rhine 
cities could boast, " that they bought of the stupid Englishman skins at 
sixpence and paid for them in tails at a shilling/' England, wiser-grown, 
now does the same by us, and she it is that now controls the commercial 
world outside of Europe, leaving to industrial France the management of 
Europe itself. Such is the lesson taught by history, and we must now 
profit by it or abandon for ever the hope of occupying the proud position to 
which our natural resources so well entitle us. To it we never can attain 
so long as we shall continue to sell, as we so long have sold, whole skins 
for sixpence, accepting pay in tails at a shilling each. That is not the road 
towards civilization, power, and influence. That it is the one which leads to 
barbarism, weakness, and dependence, is proved by the experience of all com- 
munities that have travelled on it; and by none more thoroughly than our 
own. Should proof of this now be needed, let me ask you to study the 
present condition of the prostrate South, and see how readily the great 
Cotton King has been dethroned by the united efforts of the hammer, the 
spindle, and the loom. That done, turn your eyes to the west and study 
the recent prostration of almost the whole people of the great Mississippi 
Valley before a few insignificant capitalists, who were thus to be propitiated 
into giving to their obedient slaves an additional road to the British mar- 
ket. Those who desire to command the respect of others must learn to 
respect themselves ; and that our people can never do until they shall first 
have learned that the road towards wealth and strength has, in all nations, 
and at all ages, been found to lie in the direction of bringing the plough, 
the loom, the anvil, and the ship to work in harmony with each other. 
Let them, gentlemen, once learn thoroughly that great lesson, and then, 
but not till then, will they be enabled to control and direct the commerce 
of the world. 



THE 



PUBLIC DEBT, LOCAL AO NATIONAL: 



HOW TO PROVIDE FOR ITS DISCHARGE 



WHILE 



LESSENING' THE BURTHEN OF TAXATION. 



LETTEE TO DAYID A. WELLS, ESQ., 

CHAIRMAN OF THE BOARD OF REVENUE COMMISSIONERS: 



BY 

HENRY C. CAKEY. 



PHILADELPHIA : 
HENRY CAREY BAIRD, 

INDUSTRIAL PUBLISHER, 
306 WALNUT STREET. 

1866. 



PHILADELPHIA : 
COLLIN'S, PRINTER, 705 JATNE STREET. 



* 



LETTER TO D. A. WELLS, ESQ., 

chairman of the board of commissioners for the revision of the 
revenue laws. 

Dear Sir: — 

Believing the real and permanent interests of tax payers and public 
creditors to be in perfect harmony with each other, and that error in 
regard to one must be productive of injury to both, I have put on 
paper my views as to the proper mode of dealing with the principal of 
the public debt, and have now to ask of you to give to them that con- 
sideration they may seem to you to merit. 

The amount required by the general government for current expenses, 
interest included, may be taken, as I suppose, at $280,000,000, and to 
meet that demand, with reasonable allowance for occasional drawbacks, 
it might be necessary so to arrange our revenue system as to warrant us 
in expecting from it ten or twenty millions more; say 290 or 300 millions. 
It has, however, been proposed that the annual sum of $200,000,000 be 
now, and in all the future so long as the debt shall continue to exist, set 
aside for payment of principal and interest alone — a proposition that, if 
adopted, will require that the revenue be so arranged as to enable us to 
look to it for fifty millions more, or in the whole at least 340, if not even 
350 millions. 

Two widely distinct modes of action are thus presented for considera- 
tion, by the one of which we should appear wholly to overlook the ex- 
istence of the principal debt, while by the other we should appear to be 
making provision for its early annihilation ; and yet, after having given 
to the subject all the consideration demanded by its great importance, I 
have arrived at the conclusion that, while lessening by $50,000,000 the 
annual demand upon our people, the first of these is the one by which we 
should most speedily be relieved from all charge from either principal or 
interest of the great debt that has so recently and rapidly been created. 
My reasons for so believing shall now be given. 

Widely different from any other recorded in history this was emphati- 
cally a people's war, waged for no purpose of conquest or of plunder, 
but purely and simply for that of perpetuating the Union and thus 
securing harmony of action throughout the vast territory over which 
now floats that star-spangled banner in whose defence has been expended 



4 



so vast a quantity of both blood and treasure. As a consequence of this 
first great difference we find another and most essential one in the fact, 
that the contributions towards its maintenance, whether in the form of 
personal service or in that of the sinews of war, were in so large a pro- 
portion voluntary that the exceptions thereto scarcely merit the slightest 
notice. Men by hundreds of thousands sought the field of battle, while 
other men, their wives, and children, united in giving of their means, 
whether large or small, to the performance of the great work ; the amount 
so given by individuals, at times directly and at others through the 
medium of sanitary and Christian commissions, or patriotic leagues, hav- 
ing reached, as there is reason to believe, an amount greater than the 
total receipts of the national treasury, those from loans included, during 
the period of Mr. Adams's administration, from 1825 to 1829, and that 
would now be undervalued in placing it at an hundred millions of dol- 
lars. States, counties, and cities united in the work, the amount volun- 
tarily given by them having certainly exceeded $500,000,000. Of this 
large sum much was the produce of taxes specially imposed for mainte- 
nance of the war, the rest having been raised upon pledges of the credit 
of the various corporations, nearly all of which throughout the loyal 
States have proved themselves ever ready to make themselves responsible 
for whatsoever sums might seem required for enabling them to meet 
the demands of the general government. Taking then, at $600,000,000, 
the total amount of donations by individuals and corporations, it may, 
as I think, be regarded as nearly certain that one-half thereof, or 
$300,000,000, still remains a charge upon our people, involving paymeut 
of interest to the annual extent of little, if any, less than $20,000,000. 

In some cases the debt still existing bears but small proportion to the 
total amount of contributions ; whereas in others it is very large. In 
some, as I have seen it stated, no debt has been created ; whereas in 
others the proportion actually discharged has been very small indeed. 
As a general rule, the more loyal the community the smaller is the pro- 
portion yet remaining to be paid. 

The interest on this local war debt is probably little less than a 
seventh of that payable on the national debt. This would seem to be 
but a small proportion, yet is it really an enormous one when we 
reflect that the local governments have been stripped of nearly every 
source of revenue, except the lands and houses, mills, farmers and mines, 
that were before so heavily taxed for maintenance of schools and roads, 
poor-houses and prisons, and other matters with whose direction 
they stand charged. The effect of this now exhibits itself in the 
fact that local taxation has become almost trebly burthensome, and 
threatens to result in loss to owners of real estate little less than that 
which has been inflicted on those of the rebel States. Cases could readily 
be cited in which the proceeding even now falls little short of confiscation. 



5 



In others, where property has been but partially improved, the demands 
of the several governments absorb nearly the whole receipts, the burthen 
in every case becoming more and more severe with every step in the 
direction of appreciation in the value of that currency in which taxes 
must be paid. The farmer who in 1864 sold his corn for $1.50 per 
bushel, and his pork for $40 per barrel, finds it now, with prices in the 
East almost one-half reduced, much more difficult to pay the tax of 
transportation and those other taxes required for meeting the demands 
of those who have been so fortunate as to constitute themselves creditors 
of the general and local governments. How it must be in the future, if 
gold shall speedily become the standard, and if the price of food shall be 
reduced to a level with that of the diminutive British market, interest 
meanwhile having been carried up, as it is very like to be, to the rate 
that existed before the war, may, as I think, with certainty be predicted.* 

* The average price of wheat in the London market, in 1863, as given in the 
Treasury Report, was $1.17 per hushel. That of the two succeeding years has 
heen $1.02, or little more than half of the average for 1854 to 1857. Hams and 
bacon had, in 1863, already fallen from $11.50 to $7.20 per hundred-weight. Sub- 
sequently they participated with wheat in the further decline above exhibited. 
Throughout the two last years the average of wheat in the French markets has 
been about one dollar per bushel. The foreign demand for food having thus dis- 
appeared, the effect now exhibits itself in the facts here given as regards the corn 
of Illinois : — • 

" We understand that many of the people of Warren and other towns in the 
eastern part of the county are using corn for fuel. We had a conversation with 
an intelligent gentleman who has been burning it, and who considers it much 
cheaper than wood. Ears of corn can be bought for ten cents per bushel by 
measure, and seventy bushels, worth seven dollars, will measure a cord. A cord 
of wood, including sawing, costs $9.50, which is $2.50 more than the cost of a cord 
of corn, besides the fact that the corn produces more heat than the wood. If these 
statements are true (and we have no reason to doubt them), there is no fuel more 
economical than corn. The crop of corn this year is far beyond the demand." — 
Galena Gazette. 

The British wheat crop of the last season having been deficient in both quality 
and quantity, prices in that market have slightly increased, the average of the 
first week of December, as given in the Mark Lane Express, having been $1.20 per 
bushel of 60 pounds. As a consequence of this, and of the cattle plague, there 
has been a slight demand for food of all descriptions for export to that market ; bat 
how utterly contemptible it is when compared with the great domestic one is 
shown in the following table, exhibiting the receipts at New York since September 
1, and the exports from that port to all the manufacturing nations of Europe : — 
Flour— barrels. Wheat— bushels. Corn— bushels. 

Receipts . . 1,820,152 564,650 1,509,804 

Exports . . 90,627 150,192 380,846 

The prices obtained for the trivial quantity exported determine those of the 
whole crop, amounting to more than 1,200,000,000 of bushels. Had we made a 
market at home for all the food that we now export, the yield to our farmers on 



6 



Between the demands of the holders of private mortgages and public 
bonds on one hand, and those of transportation companies on the other, 
much of the real estate of the country will be very likely to pass through 
the sheriff's hands. The deficiency in the wheat crop of the past»year 
has thus far saved the Western farmer, but when his eyes shall have once 
again been gladdened with the sight "of crops so large as to make it 
necessary to look again to Europe for a market, he will certainly find it 
wholly impossible to meet the heavy demands that, if the local public 
credit is to be maintained, must then be made.* Even at the present 
moment some of the most important branches of our manufacturing 
industry, those which are making the largest demand for food, are wholly 
dependent for their continued existence on the fact that taxes on domestic 
products are payable in paper, while for payment of duties on compet- 
ing foreign commodities the precious metals are required. Under such 
circumstances not only can there be no extension of such manufactures, 
but there is the greatest reason to apprehend that many of the establish- 
ments now in operation may be closed. With every step in that direction 
the farmer must become more and more dependent on those European 
markets which took of food from us, in the three years prior to the war, 
an average of but $10,000,000; and which, without our aid, are at present 
so over-supplied that bread may now be purchased at a price lower than 
has been known within the memory of any living man. Take from a 
dollar, the recent price in England of a bushel of wheat, the cost of 
freight from Illinois to Europe, the commissions, and all the heavy interest 
charged by various middlemen, and it will, as I think, be found that what 
will then remain to the farmer will scarcely enable him to live, leaving 
wholly out of view the payment of taxes required for meeting the demands 
of fortunate holders of city, county, State, and Federal bonds. At no 
time in the history of the country have the prospects of our farmers, if 
their dependence on European markets is to be maintained, been so bad 
as they are at the present hour. 

To those who may doubt the accuracy of the views thus presented, I 

the last year's crop would be greater than it is by not less than $600,000,000. The 
difference is the price they pay for dependence on the dimunitive market of Bri- 
tain. To make a market for wheat equivalent to the one now afforded by Europe, 
and thus to economize all that vast difference, would require but a few such iron 
works as that of Cambria, Pennsylvania, the annual consumption of flour by 
whose people is no less than 20,000 barrels. 

* The wheat crops of the three past years, and the prices of wheat and wheat 
flour in the New York market, have been as follows : — 



1863 . ' . 179,000,000 $1 57 to $1 75 $6 40 to $7 40 



Bushels. 



Price of Wheat. Price of extra Western Flour 



1864 

1865 



161,0i!0,000 
149,000,000 



2 35 to 2 70 
2 30 to 2 80 



10 25 to 10 50 
8 50 to 8 80 



7 



beg now to suggest consideration of the following facts. Twenty years 
since, the British government determined that the true way to protect its 
manufacturers was to be found in the direction of giving them cheap food. 
Since then, it has been' unceasingly engaged in the effort to induce all the 
other nations of the world to send to its little market food to be ex- 
changed for manufactures, the effect exhibiting itself in the fact that 
the British farmer now receives far less for his wheat than he did before 
the discovery of California gold ; that he pays more for nearly all the 
commodities he needs to buy ; and that the British agricultural laborer 
of the present day is a poorer and more dependent being than was his 
predecessor of the days of Adam Smith. Anxious to follow in the free 
trade direction, the economists of France sought to prove to their farming 
fellow-citizens that they were being taxed for the benefit of manufacturers; 
that they themselves were not in any manner protected ; and that what 
they needed was perfect freedom for the introduction of British and Ger- 
man manufactures. In the last six years various commercial treaties have 
been negotiated, all looking in that direction, and the result is seen in the 
existence of an agricultural crisis, the discovery of a remedy for which is 
tasking the skill of French economists. In forty years the production 
of wheat has nearly doubled, and now much exceeds the home demand. 
England recently has needed little, and as a consequence of this the French 
farmer, like his English neighbor, has obtained less for his food, while 
obliged to pay a higher price for all the articles he consumed. Of this 
cheap foreign food we are now importing annually, in the form of cloth, 
silk, and iron, to the extent of almost hundreds of millions of dollars ; and 
it is with that food that our farmers are expected to contend in British 
markets, paying all the cost of transportation thereto. How, out of the 
trifle that will remain, can they by any possibility pay all the heavy taxes, 
local and general, to which they are now subjected? It cannot be done, 
nor will it be. 

In our cities the burthen of the war debt is, for the moment, less 
severely felt; but when we look to the fact that in the one in which I 
write the city»government has found it necessary to claim no less than 
four per cent, upon the assessed value of real estate, and that upon this 
are piled the demands of the State and those of the Federal treasury, 
these latter taking the form of income taxes, taxes on successions, taxes 
on consumption so arranged as to be twice, thrice, and sometimes, as I 
believe, five times over repeated before we reach the final product— this 
last then subjected to a tax of six per cent— we find ourselves somewhat 
prepared for consideration of the question as to what must come to be the 
money value of city property when all the farmer's products shall come to 
be sold at gold prices corresponding with those now paid in England— 
when coupons issued at a time when gold was selling at nearly three to 



8 



one are to be redeemed in gold at par — and when the price of money 
shall, as it probably will, range once again between 10 and 30 per cent. 

The power to contribute to the support of government increases as the 
societary circulation becomes more rapid, and declines as it becomes more 
sluggish. What is its present state is well exhibited in an editorial of 
the New York Tribune, now but a few days old, from which the following 
is an extract : — 

"The commercial reports from the West are not favorable, and the 
activity of the winter of 1864-5 has been replaced by a dulness which for- 
bids the hope of profit to traders or forwarding companies. The millers 
are comparatively idle, and pork and beef packing is upon a reduced 
scale. In this vicinity the condition of business is not satisfactory, and 
the balance-sheets of merchants, like those of railroads, will show large 
figures, but reduced net income, and in numerous cases none at all." 

Throughout the war the government has been in alliance with the land- 
owner, the trader, the manufacturer, the laborer, and the borrower of 
money, against the lender of money and the receiver of fixed income ; 
and to that alliance *has the country been indebted for all its recent suc- 
cesses, as well as for its present position among the nations of the earth. 
The time for these latter seems, however, to have now almost arrived. 
Already the price of money has advanced at least one-.half, while that of 
some of the most important articles of food has almost as much declined. 
Thus far, however, the change is as nothing compared with that which 
would already have been experienced had not our people, despite all 
threats to the contrary, arrived at the conclusion that the day was yet far 
distant when the holders of city, State, and Federal coupons would be 
entitled to claim in gold both principal and interest, that gold to be the 
produce of taxes paid by farmers who were receiving for their wheat and 
their corn less of the precious metals than they had been accustomed to 
receive before the discovery of the mineral resources of California or 
Australia. 

The local taxation is even now most severe, but its severity must in- 
crease with every step in the direction that above is indicated ; and with 
each there must be a diminution of the power of both farmer and laborer 
to contribute to the Federal revenue. With each must come an in- 
creased demand for assumption by the Union of local debts that, 
for war purposes, have been contracted, thereby adding to the de- 
mands upon the Federal treasury at the very moment when already 
existing claims can only with constantly increasing difficulty be met. 
Will that demand be complied with ? Will the Union now assume the 
debts of the various States and corporations that have co-operated with it 
in carrying on the war ? That it would not do so has been my full belief. 
That it should not do this I am very certain, and for the reason, that the 
direct effect of such a course of action would be that of imposing upon. 



9 



those who have already taxed themselves and paid their contributions, 
for the benefit of those others who have depended almost entirely upon 
loans, trusting to the future to provide the means of payment.* » For this 
reason, and perhaps for others that might be named, the local burthens 
will be allowed to remain a charge upon the local revenues, to be carried 
until their weight shall have become unbearable, and to bring in their 
train financial revulsion to be followed, certainly, by a political revolution 
the most complete. 

Must all these things occur ? Is it needed that such should be the 
results of the wonderful and most successful war that has just been closed? 
It is not ! No such necessity really exists, yet must they certainly occur 
if we fail now to inquire into the cause of the change that already has 
been produced. Doing this, we find it in the fact that domestic taxes 
have been so piled up, one upon another, that the movement of the socie- 
tary machine has become much impeded— the protection granted by the 
tariff of 1861 having now been so far nullified that in very many cases 
little of it now remains except that which results from difference in value 
between the gold in which duties are paid, and the paper which is re- 
ceivable in discharge of internal taxes, f Trivial, even, as that protection 
has now become, the threat is held out daily, and in leading Republican 
journals, that it shall endure no longer ; and it is as a consequence of this 
that furnaces and rolling-mills no longer increase in number; that faith 
in our future has no longer that existence which throughout the war was 
so fully manifested ; that money is abundant and cheap for short loans, 
but scarce and dear for those permanent investments in the growing num- 
ber of which is always found the evidence of that confidence without 
which no real prosperity can exist; that the societary circulation becomes 
from day to day more sluggish; that our dependence on foreign workshops 
now increases; that the efflux of gold becomes more rapid; that our for- 
eign debt grows most rapidly ; that we are paying on government 

* The public derjt of Ohio, notwithstanding her vast expenditures, is less at the 
present moment than it was five years since. That of New York has grown from 
$33,000,000 to $51,000,000. The total war debt of this latter State, including that 
of cities and counties, is stated at more than $80,000,000. 

Some of the counties of Pennsylvania have raised by taxes nearly the whole 
amount that has been required for war purposes. Others have borrowed the 
major part, and are now paying interest thereon. It is little likely that those 
who have already paid will consent to assumption by the State of the debts that 
others have incurred. 

f The taxes on materials used in the book manufacture, and on the books them- 
selves, are stated at 15^ per cent., on the cost of publication. Add to these the 
taxes on fuel, machinery, &c. &c, and we shall obtain a total of not less than 20 
per cent. As a consequence of this, American publishers are now having their 
books printed in England. Without a change of system this great department of 
manufacture must inevitably be ruined. 



10 



. securities a rate of interest most disgraceful and that must prove ruinous ; 
and that there is a daily increasing certainty of the continued subjection 
of our farmers to the will of that European people which has so effectually 
taught to the agricultural nations of the world the advantage of com- 
petition for the possession of its miserably diminutive market that wheat 
there now commands but a single dollar for a bushel of sixty pounds 
weight. In fewer words, the cause of all the change may be found in 
this, that the alliance between the National Treasury and the employers 
of money — farmers, laborers, and mechanics— has been dissolved. The 
tendency of all our present measures lies in the direction of raising the 
rate of interest, to the great advantage of lenders of money ; and in that 
of enabling the receivers of interest on the various public debts to obtain 
from the farmer more food, from the workman more clothing, and from 
the laborer more labor, for less and less of money. 

That is certainly the road to ruin, and if we shall persist in the deter- 
mination to travel on it, all the sad results that have above been indicated 
must assuredly be realized. That we may avoid them, it is needed that 
we dissolve the existing alliance between those who have merely lent their 
money to cities, counties, States, and to the National Treasury, and renew 
that which has heretofore existed between those who have given their 
time — given their services — given their means — for the public use. To 
that end we need to abolish all those taxes which now so seriously impede 
the societary circulation ; all those which tend so much to prevent the 
application of capital in the direction of that development of our internal 
resources which would give value to land and enable its owner more 
readily to bear the heavy burthens that necessarily have been imposed 
upon it for payment of interest on the vast amounts given to the public 
service ; all those which tend in any manner to lessen the demand for 
labor, and thus diminish demand for the farmer's products. 

Freed from the income tax, the landowner would find less difficulty in 
providing for the maintenance and improvement of roads and schools. 
Relieved of the burthen now resulting from taxes on hats and coats, shirts 
and shoes, he could more readily increase the number of his ploughs and 
harrows, cheapened as these latter then would be by the abolition of taxes 
on coal and iron and all their products. With every step in this direction, 
mines and furnaces, factories and rolling-mills, would become more numer- 
ous, making demand for all the produce of his land and thus diminishing 
the necessity for going to distant markets ; abolition of taxes on transpor- 
tation and on machinery of transportation meanwhile co-operating with the 
growing cheapness of bars and engines in giving him increased ability to 
determine for himself whether to sell in the distant one or in that which 
is near, and also to determine for himself by what road he would go to 
the market he might prefer — freedom of trade and freedom of man thus 



11 



following, as it always does, in the train of an increased rapidity in the 
societary circulation and increase of the societary force. 

Taking at $300,000,000 the amount required for payment of interest on 
the national debt and for maintenance of the national government, we 
have a sum that could readily be raised by duties on foreign merchan- 
dise, by taxes on cotton, tobacco, whiskey, beer, and some few other 
commodities, and by aid of stamps — at once and forever abolishing the 
tax on incomes and all those taxes on manufactures which now so greatly 
tend towards production of the state of paralysis above described. 

The adoption of such a measure as this would, it may be said, have the 
effect of greatly protracting the time at which the national debt would 
be discharged. Not so, however. On the contrary, it is the road towards 
the most speedy annihilation of the debt, all experience having shown 
that a merely arithmetical increase in the rapidity of the societary circu- 
lation is followed by an almost geometrical one in the power to con- 
tribute to the support of government. Throughout the period of 
Mr. Buchanan's administration it would have been impossible by any 
means that could have been devised to obtain an annual amount of con- 
tributions thirty millions in excess of that which we see to have been 
collected. Nevertheless, "throughout that of his successor our people fur- 
nished to State, county, city, and national treasuries an excess of almost 
$1,000,000,000 a year! Why was this? Because of a wonderful 
activity of the circulation. ' Let us maintain that activity, and we shall 
find ourselves enabled in less than twenty years to annihilate liabilities 
greater than those of industrial France, which now, notwithstanding her 
37,000,000 of population, actually staggers under the weight of the mere 
interest upon her debt. Let us do that, and it can be done, and we shall 
have achieved a triumph more wonderful even than that of the extraordi- 
nary years through which we last have passed. 

Before proceeding to show how it is that this may be done, let me call 
your attention to the fact that, while our population has been accustomed 
to duplicate itself in twenty-four years, our production has been supposed 
to increase twice more rapidly, and to quadruple itself in the time re- 
quired for the duplication of the other. That the power to contribute 
to the support of Government increases in a ratio greatly more rapid 
even than production is proved by the experience of every period of our 
history in which the policy of the country has tended to the promotion 
of domestic commerce, as in that ending in 1835, when we finally ex- 
tinguished the national debt; as in that from 1842 to 1848, when we so 
rapidly passed from the state of exhaustion into which we had been 
brought by the British free trade provisions of the tariff of 1834, and 
thus prepared ourselves for the expenditures of the Mexican war ; and 
still more recently when, close upon the heels of the almost bankruptcy 
of Mr. Buchanan's administration, we passed so nearly instantly to a 



state of tilings in whicb we were enabled to give to the general and local 
governments an amount of contributions larger than had ever before been 
given by any people of the world. So, too, is it proved by the experience 
of Great Britain, the revenue of that country having, in the short period 
of twenty years, from 1842 to 1862, grown from £48,000,000 to £12,000,- 
000, notwithstanding the exemption from taxation of 1,119 out of 1,163 
articles that had previously been subjected to import duties. 

The close of next twenty years is likely to exhibit almost a duplication 
of our numbers, production meantime having at least quadrupled. That 
it may do so it is needed that we at once relieve ourselves from all those 
taxes which now so greatly impede the internal commerce, and which 
compel us to look abroad for so many commodities that should be pro- 
duced at home. Let that be done, and the remainder, calculated now to 
yield $300,000,000, will grow with such rapidity as to enable us, before 
that time shall have arrived, to extinguish all of that debt which now 
bears interest. 

What is needed for the accomplishment of that object, and all that is 
needed, is that stimulation of the societary circulation by means of which 
every man who has labor, or labor's products, to sell, shall be enabled on 
the instant to find a purchaser for his commodity, be it of whatsoever 
sort it may. To that end we need that producer and consumer shall, as far 
as possible, take their places by each other, as has been the case through- 
out the past four years to an extent that we never before had known. 
At the present moment their exchanges are everywhere impeded by a 
taxation which becomes from day to day more oppressive, and now closely 
resembles that which existed in Great Britain less than half a century 
since, described by the Rev. Sydney Smith in the following words : — 

" Taxes were piled on taxes, until they reached every article which 
enters into the mouth, or covers the back, or is placed under foot; taxes 
upon everything which it is pleasant to see, hear, feel, smell, or taste; 
taxes upon warmth, light, and locomotion ; taxes on everything on earth, 
and in the waters under the earth ; on everything that comes from abroad 
or is grown at home ; taxes on the raw material ; taxes on fresh value 
that is added to it by the industry of man ; taxes on the sauce which 
pampers man's appetite, and the drug which restores him to health ; on 
the ermine which decorates the judge, and the rope which hangs the 
criminal ; on the poor man's salt and the rich man's spice ; on the brass 
nails of the coffin and the ribbons of the bride ; at bed or board, couchant 
or levant, we must pay. 

"The school-boy whips his taxed top; the beardless youth manages 
his taxed horse with a taxed bridle, on a taxed road; and the dying 
Englishman, pouring his medicine which has paid seven per cent, into a 
spoou that has paid fifteen per cent., flings himself back upon the chintz 
bed which has paid twenty-two per cent., makes his will on an eight-pound 



13 



stamp, and expires in the arms of an apothecary, who has paid a license 
of a hundred pounds, for the privilege of putting him to death. His 
whole property is then immediately taxed from two to ten per cent. Be- 
sides the probate, large fees are demanded for burying him in the chancel ; 
his virtues are handed down to posterity on taxed marble ; and he is then 
gathered to his fathers, to be taxed no more." 

This was a terrible picture when it was first presented, many years since, 
to the view of the people of England. Equally terrible, and equally true, 
is it now, when presented for our consideration ; and yet, as I propose 
here to show, it is really as nothing when compared with the tax resulting 
from dependence on the diminutive demands of manufacturing Europe. 
That this may be properly appreciated, let us take the facts of the past 
few years in reference to the wheat crop, and the demand made upon us 
for wheat and flour for the supply of European markets. The harvests 
of both England and France, in 1858 and 1859, were abundant, as a 
consequence of which the demand made upon us by them for food of all 
descriptions, for the three years ending with 1860, amounted, as has been 
already shown, to an annual average of only $10,000,000. As a conse- 
quence, prices here were very low ; the farmers were everywhere in debt; 
money was at the highest rates; and the whole agricultural interest of the 
North was in a condition of. extreme distress. The rebellion came, cut- # 
ting off the Southern demand upon the West; but, almost as by a special 
intervention of Providence, the British and French crops of 1860 and 
1861 proved to be failures, and thus enabled us to find abroad the market 
then lost at home. Since then, their crops have been very large, while 
ours have been declining, as follows : — 

1863. 1864. 1S65. 

Wheat crop, bushels . . 179,000,000 160,000,000 148,000.000 
Average price in New York $1 66 $2 52 $2 55 

Product .... $298,000,000 $403,000,000 $378,000,000 

The yield of this last year having been less than of the first by 31,000,000, 
the product has increased no less than $80,000,000. Had it been other- 
wise had the crop grown gradually until it had reached in this last year 

200,000,000, thereby producing a necessity for dependence on those Eu- 
ropean markets in which the price had fallen to a dollar — must not that 
of our Eastern markets have been lower than had ever before been known? 
Most certainly such would have been the case. Had it so been, could we 
anywhere have found the hundreds of millions of revenue that have been 
paid in the past twelve months ? Could we anywhere now find those others 
upon which we are counting for the current year ? Assuredly not ! The 
farmers could have purchased neither cloth nor iron, nor could they have 
paid the taxes on their land. They and the national treasury have been 
saved from ruin by the deficiencies of our two last years' crops. Is it 
right that this dependence on the mere accidents of European harvests 



14 



should be permitted longer to continue ? Should we not, by creating 
a great home market, enable our financiers to make more certain calcu- 
lations of revenue, such as are made in France and England ? That we 
must do so if we would avoid ruin, and early ruin, I regard as absolutely 
certain. 

Every yard of cloth — every bar of iron — every pound of coal — imported 
from Europe, represents so much foreign food. Of that food we now 
import to the annual extent of almost hundreds of millions of dollars, 
while Europe now takes of us almost none, and while the reports just now 
published in reference to the productiveness of French agriculture are 
rendering it daily more and more certain that, except in some very extra- 
ordinary cases, France cannot only feed herself, but also readily and 
cheaply supply any deficiency that may hereafter arise in Britain.* Such 
being the case, where are we in the future to look abroad for markets ? 
Nowhere! Such markets do not exist, and if we do not now determine 
to create them for ourselves, there must arise a s'tate of things in which it 
will become utterly impossible to collect the means of defraying even the 
current expenditures of the general and local governments. 

So rapid, under the tariff of 1842, was the growth of the cotton manu- 
facture, that in 1848 it was asserted by the editor of the Charleston Mer- 
» cury that before the lapse of a dozen years the South would have ceased 
to export raw cotton. What was then prophesied may now, with moderate 
exercise of judgment, be fully realized. A judicious use of the taxing- 
power, accompanied by provisions securing repayment of the tax when 
the cotton should be exported in a manufactured state, would, in a few 
short years, transfer here nearly the whole of this great branch of manu- 
facture, thereby securing to the government a constantly growing revenue, 
and to the planter a certain price that could never again, as I am well 

* WHEAT CROP OF FRANCE. 



Average of five years ending in — 


Bushels. 


Per head. 


1821 


. 50,000,000 


1.62 


1826 . ' . 


. 58,000,000 


1.82 


1831 


. 58,000,000 


1.79 


1836 ... 


67,000,000 


2.01 


1841 


. 69,000,000 


2.00 


1846 


. 74,000,000 


2.09 


1851 


. 85,000,000 


2.36 


1856 ... 


. • 81,000,000 


2.28 


1861 


. 99,000,000 


2.69 



Low as, in 1863, was the price of wheat in England, the export from France to 
that country, of wheat and wheaten flour, was the equivalent of 800,000 barrels 
of the latter. In the succeeding years it must have been even more than this, as 
the French price was below the English one. Greatly manufacturing as she is, 
France supplies England with much more food than, agriculturists as we are, we 
sell to the whole of Europe. 



15 



satisfied, fall below 30 cents per pound. Let us, then, determine to mine 
our own coal and make our own cottons aud our own iron, as we are now 
producing nearly all the wool and most of the woollen cloths we need, 
and we shall thereby make a market for food so great as not only to 
relieve our farmers from all necessity for looking to Europe for markets, 
but also make demand for all the food of Canada. In the ten years ending 
with 1864, Great Britain increased her produce of coal from 64 to 92 
millions of tons. Let us do as much, and we might readily do more, and 
we shall thereby make at home such a market for the products of the farm 
as will add to the money value of our land, North and South, East and 
West, so many thousands of millions as will cause our present public debt, 
local and national, to sink into insignificance. Let us do that, and the 
control of the commerce of the world will then have passed from the 
eastern to this western side of the Atlantic, here forever to remain. 

At the close, half a century since, of the great wars of the French 
Revolution, England abolished her sinking fund and gave her undivided 
attention to the measures required for increasing the power of production 
and accumulation, and for thus reducing the rate of interest on public and 
private debts, the results of that course of action exhibiting themselves in 
the fact that, notwithstanding frequent and expensive wars, she now finds 
herself prepared to enter upon the reduction of her debt. It was a great 
example — one that should now be followed. The more thoroughly it shall 
be so, the greater must be the growth in the money value of both land and 
man — the larger the reward of landowner and laborer — the greater the 
growth of the productive power — the smaller the proportion required for 
public purposes — and the more speedy the arrival of the period when we 
shall not only have been relieved from the burthen of foreign debts, but 
have become lenders to the outside world, as Great Britain so long has 
been. Then, and not until then, shall we have attained a real independence. 



It may, and probably will, be said that the determination to adopt no 
measures looking to instant reduction of the national debt would have 
an injurious effect upon the price of our securities in Europe. Should it 
prove so to be, the nation would have reason to rejoice, however much 
bill-brokers and bankers might find therein reason for lamentation. 
Nothing but injury can, by any possibility, result from leading foreigners 
to believe that the course we now pursue can ever end in resumption of 
specie payments. Every step we take leads in the direction of bank- 
ruptcy the most complete, to be followed by repudiation. With each, 
the rate of interest rises, to the great advantage of the money-lender of 
the present, and great disadvantage of the laborer, the farmer, and the 
mechanic— the men who need the aid of others' capital. With each, the 



16 



price of food falls, to the great advantage of all whose income results 
from taxation of those to whose labor we stand indebted for both food 
and wool. With each, the holders of coupons and receivers of taxes are 
more and more enabled to live abroad,. there consuming, to the annual 
extent of probably a hundred millions, French, British, and German food. 
With each, there is here diminished faith in our future, and diminished 
power to make a market at home for the various products of the land. 
With each, the London Times becomes more enthusiastic in its approval 
of our financial policy. Well it may do so, as it is precisely the one 
required for perpetuating our dependence on the capitalists of Britain. 
"In the eyes of the English," says that eminent philosopher, Mons. De 
Tocqueville, "that which is most useful to England is always the cause 
of justice. The man or the government which serves the interests of 
England has all sorts of good qualities; he who hurts those interests, all 
sorts of defects ; so that it would seem that the criterion of what is right, 
or noble, or just, is to be found in the degree of favor or opposition to 
English interest." 

English interests are to be served by heavy American taxation, and as 
that taxation becomes at every step of our present career more and more 
burthensome, it meets, of course, with English approval. When con- 
tinuance in that course shall have led, as it certainly must do, to the 
reinstatement in power of the friends of Britain and of British free trade, 
the gentlemen who now direct our affairs may perhaps begin, but too 
late begin, to appreciate the magnitude of the error that is now so un- 
happily being committed. 

Commending these views to your careful consideration, 
I remain, witli great regard, 

Yours very truly, 

HENRY C. CAREY. 

Philadelphia, January 3, 18G6. 



CONTRACTION OR EXPANSION? 
REPUDIATION OR RESUMPTION? 



LETTERS TO THE HON. HUGH M'CULLOCH, 

SECRETARY OF THE TREASURY. 



BY 

HENRY C. CAREY. 



PHILADELPHIA : 
HENRY CAREY BAIRD, 
INDUSTRIAL PUBLISHER, 
406 WALNUT STKEET. 
1866. 



PHILADELPHIA : 
COLLINS, PRINTER, 705 JAYNE STREET. 



LETTERS TO THE HON. H. M c CULLOCH, 

SECRETARY OF THE TREASURY. 



LETTER FIRST. 

Dear Sir: — 

Fully agreeing with you, as I do, in regard to many most important 
questions of public policy, it is with great regret that I find myself so 
wholly differing in reference to the existence of that "plethora of 
paper money" of which you speak, and to which you now attribute the 
"large importation of foreign fabrics;" the " splendid fortunes realized 
by skilful manipulations at the gold room or stock board the "rise in the 
prices of the necessaries of life;" the increase in the number of "non 
producers;" and the most important fact that "productive industry is 
being diminished." 

That this, to a considerable extent, is an accurate exhibit of the actual 
state of affairs I am not at all disposed to doubt, but were I even to 
admit its perfect accuracy the questions would still remain : Why are 
such the facts ? Why is it that men are now unemployed who but a 
twelve month since were so fully occupied ? Why is it that our foreign 
debt so steadily increases ? To these questions you furnish one general 
answer, that "paper money" is too abundant; and that if we would 
bring about a more healthy state of things its quantity must be diminished. 
I, on the contrary, hold that no such " plethora" exists, and that the 
real cause of all this error must be sought for in a direction precisely 
opposite, there to be found in measures of contraction with which the 
country has been threatened ; and fully do I believe that if we would 
bring about a more healthy condition of affairs it is required that we 
move in a direction exactly the reverse of that which you so recently 
have indicated. 

Differing thus widely, one of us must be much in error. It may be 
that I am wrong, but until I can look at the facts in a manner very dif- 
ferent from that in which they now present themselves to my mind, I must 
continue to believe that I am right. The error may, possibly, my dear 
sir, be with yourself, and if it can be shown that such is the case, you 
will, I am sure, rejoice at being so convinced. So believing, I propose, 



4 



with a view to the determination of the question whether such "plethora" 
does or does not exist, to furnish here a comparison of the actual circu- 
lation of the three chief commercial countries of the world, France, Great 
Britain, and the United States ; of the needs of each for such circulation ; 
and of their power profitably to use it. Should the result of such com- 
parison be that of proving that not only is our medium of circulation not 
in excess in its relation to population and production, but that it is greatly 
short in the proportion which it bears to both, then, as I most respect- 
fully submit, will it be necessary to look in a direction opposite to 
that of " plethora of paper money" for the cause of error, and there, on 
further examination, perhaps it may be found. 

Seven years since the coin in use in France was estimated at 4,880,- 
000,000 francs, or more than $900,000,000. Since then the quantity 
must have increased, the substitution of the convenient gold for the heavy 
and cumbrous silver coins that even then were still so generally in use 
having, as has been stated by a recent writer, had the effect of placing 
napoleons in pockets that before could carry only francs. Admitting, 
however, that the increase has been sufficient only to add to the coin in 
the hands of the public as much as before had been in the bank vaults, we 
have a hard money circulation of . . . . $900,000,000* 
To which must now be added the " paper money" cir- 
culation, which may be taken at about . . 170,000,000f 

Giving a grand total of $1,070,000,000 

Or nearly $30 per head. 

The coin actually in use in Great Britain and Ireland was estimated a 
few years since at £60,000,000. Since then it must greatly have in- 
creased, but, claiming no allowance on that account, I put it here at 
the same figure, being the equivalent of only . . . $300,000,000 

The " paper money" circulation of the past few years has 
varied between 37J and 42} millions. Taking the mean of 
these quantities we have the equivalent of about . . 200,000,000 

To this must now be added a paper circulation of a 
character little known in this country, and consisting of pro- 
mises of individuals, in the form of bills of exchange, to 
deliver money at a future day. Of these, large quantities 
are in constant circulation, returning finally to their payers 
covered with indorsements, sometimes 15, 20, and even more 



* From 1850 to 1865 the importations of the precious metals were in excess of 
the exportations to the extent of $334,000,000. The quantity held in 1852 was 
estimated by M. du Puynode at 3,500,000,000, or nearly $700,000,000. 

f The amount in 1853 was only 395,000,000 francs. From that time it had 
grown with great steadiness until, in 1862, it had attained the figure of 869,000,000. 
In 1864 it was 804,000,000. 



5 



in number, and having throughout the whole period of 
their existence performed all the service that here is per- 
formed by bank notes. The whole quantity of bills of ex- 
change outstanding at any given time was estimated, some 
years since, at £200,000,000, and must now be greatly 
larger. Allowing here but one-fifth of that sum to be 
used for purposes of circulation, we have the equivalent of 200,000,000 

Giving a grand total of $700,000,000 

Or but little less than $25 per head. 

The actual circulation of the Union, as just now furnished by the 
Comptroller, we know to be $460,000,000, being $12.50 per head, or 
one-half of that of Great Britain and Ireland.* Compared with that of 



* The amount of national bank notes in actual circulation on the 

1st day of October last, was $171,321,903 

The amount of State bank notes in circulation at the same date, 
as appears by returns to the Commissioner of Internal Reve- 
nue, was 78,867,575 



Making the bank circulation on the 1st day of October last . 250,189,378 
The amount of legal-tender notes and fractional currency issued 

and outstanding on the 1st of October, 1865, was . . . 704,584,658 

National bank notes in the hands of banks not yet issued . 19,525,152 

National currency yet to be issued to banks .... 109,152,945 



Making the aggregate amount of legal- tender and bank notes in 

circulation as authorized to be issued to and by the banks 1,083,452,233 

From which sum should be deducted, State 
bank circulation now outstanding that will be 
retired about as fast as national currency is 
issued to converted banks .... $78,867,575 

Also the amount of " compound interest notes" 
converted into 5-20 bonds since the 1st of 
October last 44,417,329 



123,284,904 



The amount then left as the available currency of the country 

is * 960,167,326 

In order to ascertain the amount of actual 

active circulation on the 1st day of October 

last, there should be deducted from the last 

mentioned sum — 

The amount of national currency delivered to 

banks, and not then in circulation . . $19,525,152 

National circulation not delivered to banks . 109,152,945 

Amount of legal-tender notes held by banks, in- 
cluding $74,261,847 compound interest notes, 193,094,365 



Carried forward . . . . . $321,772,462 



$960,167,326 



G 



France it stands in the ratio of but 5 to 12 ; and yet, for various reasons, 
we should be entitled to expect to find it bearing to population a larger 
proportion than in either one of those countries. Among these reasons 
are the following : — 

First. To pay any given number of mechanics or laborers required, 
before the war, more than twice the quantity of circulation that would 
have been needed in France ; and one-half more than would have been 
required in Great Britain. The war having been accompanied by the esta- 
blishment of a National Free Trade System there came a greatly increased 
demand for laborers with so large an increase of wages that the quantity 
of circulation now required for paying any given number of hands must 
be taken at twice that needed by the latter and thrice that required by 
the former. 

Second. The proportion borne by circulation to numbers tends rapidly 
to increase as population becomes more widely scattered, and as rapidly 
to diminish as men are enabled to come more near together. That this 
is so, is shown in the fact that thousands of millions of exchanges are 
weekly performed in New York and other great commercial cities without 
the necessity for using a single note ; whereas, among a scattered people 
like our own, every exchange, large or small, necessitates the delivery of 
a given quantity of coin or "paper money. " Such being the case, the 
30,000,000 of our people, dispersed over a territory eight times more 
extensive than that occupied by the 37,000,000 of France, and twelve 
times greater than that of the United Kingdom, might fairly be expected 
to demand a circulation, per head, thrice greater than that of either of 
those countries ; and yet, as has been shown, it is but half as great as that 
in use in the one, and much less than half that employed by the other. Is 
it then, my dear sir, to be believed that there is among us, really, any of 
that " plethora" of which you have spoken ? As it seems to me did 
we need to find one it would be beyond the ocean that we should seek it. 



Brought forward $321,772,462 $960,167,326 

Compound interest notes, other than those held 
by banks, mostly held as investments by insu- 
rance and trust companies and savings banks, 

less say $10,000,000 in actual circulation . 121,314,195 

Currency in the treasury of the United States, 56,236,440 

Total 499,323,097 

Which will show the actual circulation to be . . . . $460,844,229 

This favorable exhibit of the amount of paper in actual circulation, is owing 
in a great degree to the accumulation of currency in the hands of the banks, in 
the absence of the great demands of the government for currency since the close 
of the war. — Report of the Comptroller of the Currency, 



1 



The grand error that, as it seems to me, we are accustomed to commit, 
is that which results from limiting ourselves to a comparison of the various 
periods of our own financial history, leaving wholly out of view the facts 
furnished by the history of other commercial nations. Thus, in the com- 
parative view of our circulation given in your Report it is shown that it 
grew from $60,000,000 in 1830 to $140,000,000 in 1836; and from 
$58,000,000 in 1843 to $207,000,000 in 1860; but those facts are not 
supplied by means of which your readers might be enabled to judge as 
to whether or not even the largest of these figures was in excess of the 
absolute wants of the community — whether it did, or did not, indicate 
the existence of any " plethora of paper money." That it did not do so 
has seemed to me, and must now, as I think, appear to you, to be very 
certain. On the contrary, when compared with other commercial coun- 
tries it furnishes conclusive evidence that the supply of the medium of 
circulation had always been deficient, and thus enables us to understand 
more accurately the real cause of the extraordinary activity of the so- 
cietary circulation which prevailed throughout the war, and to which our 
people have been indebted for power to give to the government the 
thousands of millions of dollars required for enabling it to dictate the 
terms of peace. 

Of all the phenomena exhibited during the wonderful war in which we 
have been engaged, among the most extraordinary are those connected 
with the transportation of vast armies and all the vast supplies by them 
required, throughout a country of such vast extent, and over roads 
scarcely any portion of which south of the Delaware could boast of more 
than a single track, that, too, supplied with rails of the poorest kind. 
Never in the world, even under circumstances far more favorable, has such 
an amount of transportation been effected— never so large an amount of 
public work so well accomplished. Precisely so has it been, and now 
is, with the machinery by means of which circulation is effected from hand 
to hand, no country having ever yet performed so large an amount of 
exchanges by means of a medium of exchange the supply of which was so 
utterly disproportioned to the amount of production, to the quantity of 
exchanges needed to be made, or to the number of people empowered to 
make them. So far from " plethora" having either then or at any pre- 
vious time existed, the financial history of the Union presents an uninter- 
rupted series of figures the study of which is calculated to excite surprise 
that so much has always been done when the supply of machinery by 
means of which alone it could be done, has throughout our whole ex- 
perience been so deficient. No other people, with such means, could 
so well have effected the transportation of the war; no other could, 
with such a supply of the medium of exchange, have so well effected the 
exchanges of both war and peace. 



8 



Proposing in another letter to examine into the influence of "paper 
money" on the action of the past five years, I remain, meanwhile, with 
great respect and regard, 

Yours very truly, 

HENRY C. CAREY. 

Philadelphia, January 23, 1866. 



LETTER SECOND. 

Dear Sir : — 

Had it been possible, on the 4th of March, 1861, to take a bird's-eye 
view of the whole Union, there would have been seen — 

Millions of men and women wholly or partially unemployed, because 
of inability to find persons able and willing to pay for service : 

Hundreds of thousands of workmen, farmers, and shopkeepers holding 
articles of various kinds for which no purchasers could be found : 

Tens of thousands of country traders poring over their books seeking, 
but vainly seeking, to discover in what direction they might look for 
obtaining the means with which to discharge their city debts: 

Thousands of city traders endeavoring to discover how they might 
obtain the means with which to pay their notes : 

Thousands of mills, factories, furnaces, and workshops large and small, 
standing idle while surrounded by persons who desired to be employed ; 
and 

Tens of thousands of bank, factory, and railroad proprietors despairing 
of obtaining dividends by means of which they might be enabled to go 
to market. 

High above all these a National Treasury wholly empty, and to all 
appearance little likely ever again to be replenished. 

Why was all this ? The laborer needing food, and the farmer clothing, 
why did they not exchange ? Because of the absence of power on the 
part of the former to give to the latter anything with which he could 
purchase either hats or coats. 

The village shopkeeper desired to pay his city debts. Why did he 
not ? Because the neighboring mill was standing idle while men and 
women, indebted to him, were wholly unemployed. 

The city trader could not meet his notes, because his village corre- 
spondents could not comply with their engagements. The doctor could 
not collect his bills. The landlord could not collect his rents ; and all, 
therefore, from laborer to landlord, were compelled to refrain from the 
purchase of those commodities to whose consumption the National 



9 



Treasury had been used to l<5ok for the supplies upon which it thus far 
had depended. 

With all, the difficulty resulted from the one great fact already indicated 
in regard to the laborer. If he could have found any one willing to give 
him something that the farmer would accept from him in exchange for 
food — that the farmer could then pass to his neighbor shopkeeper in 
exchange for cloth — that that neighbor could then pass to the city trader 
in satisfaction of his debt — and that this latter could then pass to the 
bank, to his counsel, his physician, or his landlord — the societary circula- 
tion would at once have been re-established and the public health restored. 

That one thing, however, was scarcely anywhere to be found. Its 
generic name was money, but the various species were known as gold, 
silver, copper, and circulating notes. Some few persons possessed them 
in larger or smaller quantities ; but, the total amount being very small 
when compared with that which was required, their owners would not 
part with the use of them except on terms so onerous as to be ruinous 
to the borrowers. As a consequence of this, the city trader paid ten, 
twelve, and fifteen per cent, per annum for the use of what he needed, 
charging twice that, to the village shopkeeper, in the prices of his goods. 
The latter, of course, found it necessary to do the same by his neighbors, 
charging nearly cent, per cent. ; and thus was the whole burthen resulting 
from deficiency in the supply of a medium of exchange thrown upon the 
class which least could bear it, the working people of the country — 
farmers, mechanics, and laborers. As a consequence of this, they shrunk 
in their proportions as the circulation became more and more impeded, 
while with those who held in their hands the regulation of the money 
supply the effect exhibited itself in the erection of those great palaces 
which now stand almost side by side with tenement houses whose occu- 
pants, men, women, and children, count by hundreds. The rich thus 
grew richer as the poor became more poor. 

Why was all this ? Why did they not use the gold of which California 
had already sent us so many hundreds of millions ? Because we had most 
carefully followed in the train of British free trade teachers who had 
assured our people that the safe, true, and certain road towards wealth 
and power was to be found in the direction of sending wheat, flour, corn, 
pork, and wool to England in their rudest form, and then buying them 
back again, at quadruple prices, paying the difference in the products of 
Californian mines ! Because we had in this manner, for a long period 
of years, been selling whole skins for sixpence and buying back tails for 
a shilling ! Because we had thus compelled our people to remain idle 
while consuming food and clothing, the gold meanwhile being sent to 
purchase foreign food and clothing for the workmen of London and Paris, 
Lyons, Manchester, and Birmingham I 

Why, however, when circulating notes could so easily be made, did not 



10 



the banks supply them, when all around f ould so gladly have allowed 
interest for their use ? Because those notes were redeemable in a com- 
modity of which, although California gave us much, we could no longer 
retain even the slightest portion, the quantity required abroad for pay- 
ment of heavy interest, and for the purchase of foreign food in the forms 
of cloth and iron, having now become fully equal to the annual supply, 
and being at times even in excess of it.* That demand, too, was liable 
at any moment to be increased by the sale in our markets of certi6cates 
of debt then held abroad to the extent of hundreds of millions, the 
proceeds being claimed in gold and thus causing ruin to the banks. To 
be out of debt is to be out of danger, but to be in debt abroad to the 
extent of hundreds of millions is to be always in danger of both public 
and private bankruptcy. The control of our whole domestic commerce was 
therefore entirely in the hands of foreigners who were from hour to hour 
becoming richer by means of compelling us to remain so dependent upon 
them that they could always fx the prices at which they would buy the skins, 
and those at which they would be willing to sell the tails. As a necessary 
consequence of this, the nation was not only paralyzed, but in danger of 
almost immediate death. 

Such having been the state of things on the day to which I have re- 
ferred, let us now look at the remedy then required. Let us, for a 
moment, suppose the existence of an individual with wealth so great that 
all who knew him might have entire confidence in the performance of 
what he promised. Let us then suppose that he should have said to the 
laborers of the country, " Go into the mills, and I will see that your 
wages are paid;" to the millers, "Employ these people, and I will see 
that your cloth is sold ;" to the farmers, " Give your food to the laborer 
and your wool to the millers, and I will see that your bills are at once 
discharged to the shopkeepers, "Deliver your coffee and your sugar to 
the farmer, and I will see that payment shall forthwith be made;" to the 
city traders, " Fill the orders of the village shopkeeper and send your 
bills to me for payment ;" to the landlords, " Lease your houses and look 
to me for the rents ;" to all, " I have opened a clearing house for the 
whole country, and have done so with a view to enable every man to find 
on the instant a cash demand for his labor and its products, and my whole 
fortune has been pledged for the performance of my engagements ;" and 
then let us examine into the effects. At once the societary circulation 
would have been restored. Labor would have come into demand, thus 



* From November, 1849, to December, 1864, the gold shipped from 
California amounted to ..... $694,908,923 
Excess exports of the precious metals in the same period . 587,746,078 

Balance . . . . . . . $107,162,845 

Allowing now but $7,000,000 for the annual consumption in the arts, the whole 
balance would have been thus disposed of. 



11 



doubling at once the productive power of toe country. Food would 
have been demanded, and the farmer would have been enabled to improve 
his machinery of cultivation. Cloth would have been sold, and the spin- 
ner would have added to the number of his spindles. Coal and iron would 
have found increased demand, and mines and furnaces would have grown, 
in numbers and in size. Houses becoming more productive, new ones 
would have been built. The paralysis would have passed away, life, 
activity, and energy having taken its place; and all these wonderful effects 
having resulted from the simple pledge of the one sufficient man that he 
would see the contracts carried out. He had pledged his credit and 
nothing more. 

What is here supposed is almost precisely what then was done by the 
National Treasury, the only difference having been, that while in the one 
case the farmers and laborers had been required to report themselves to 
the single individual or his agents, the Government has since, by the 
actual purchase of labor and its products, and the grant of its pledges in 
a variety of shapes and forms, enabled each and every man in the country 
to arrange his business in the manner that to himself has seemed most 
advantageous. To the laborer it has said, "We need your services, and 
in return will give you that which will enable your family to purchase 
food and clothing." To the farmer, "We need food, and will give you 
that by means of which you can pay the shopkeeper." To the manufac- 
turer, "We need cloth, and will give you that which will enable you to 
settle with the workman and the farmer." To the naval constructor, 
" We need your ships, and will give you that which will enable you to 
purchase timber, iron, and engines." In this manner it is that domestic 
commerce has been stimulated into life, the result exhibiting itself in the 
facts, that while we have in the last five years increased to an extent 
never known before the number of our houses and our mills, our mines, 
and furnaces, our supplies of food, cloth, and iron; and while we have 
diversified our industry to an extent that is absolutely marvellous ; we 
have been enabled to lend, or pay, to the Government thousands of 
millions of dollars, where before, under the system which made us wholly 
dependent on the mercy of the wealthy capitalists of England, we found 
it difficult to furnish even tens of millions. The whole history of the 
world has presented no case of a financial success so perfect. 

In the physical body health is always the accompaniment of rapid cir- 
culation, disease that of a languid one. Now, for the first time since the 
settlement of these colonies, have we had experience of the first. Every 
man who desired to work, found a purchaser for his labor. Every man 
who had labor's products to sell, found a ready market. Every man 
who had a house to rent, found a tenant. And why? Because the 
Government had done for the whole nation what Companies do for locali- 
ties when they give them railroads in place of wagon roads. It had so 



12 



facilitated exchange between consumers and producers, that both parties 
had been enabled to pay on the instant for all they had had need to pur- 
chase. 

Important, however, as is all this, it is but a part of the great work 
that had been accomplished. With every stage of progress there had been 
a diminution in the general rate of interest, with constant tendency towards 
equality in the rate paid by the farmers of the East and the West, by the 
owner of the little workshop and by him who owns the gigantic mill. 
For the first time in our history the real workingmen — the laborer, the 
mechanic, and the little village shopkeeper — had been enabled to com- 
mand the use of the machinery of circulation at a moderate rate of interest. 
For the first time had nearly- all been enabled to make their purchases 
cash in hand, and to select from among all the dealers those who would 
Supply them cheapest. For the first time had this class known anything 
approaching to real independence ; and therefore has it been that, not- 
withstanding the demands of the war, the power of accumulation has 
been so great. The gain to the community from the economy of labor 
and labor's products has counted by thousands of millions of dollars, and 
it has been because of that gain that we have been enabled to furnish to 
the Government an amount of contributions so far exceeding anything of 
the kind that the world before had known. 

Hie 'power of accumulation exists in the ratio of the rapidity of circula- 
tion, and it does so because the greater that rapidity the more complete is 
the economy of human force, the greater the production, and the more 
complete the economy of interest. That that power may grow a full 
supply of the medium of circulation is as much required as is a proper 
supply of railroad cars and engines. Without these latter there would 
be few exchanges between the East and the West, the North and the 
South ; and without the former it is wholly impossible that there should 
be that rapidity in the exchange of human service to which alone must 
we look if we would have increase of production and of societary force. 

The view above presented of our power of accumulation throughout the 
period of Mr. Lincoln's administration differs slightly from that which 
commonly is entertained ; and yet, my dear sir, when you shall have 
reflected upon the facts which I shall now present, you will, as I feel 
assured, agree with me in the belief that it has not been overrated. It is 
probably true, as is so frequently asserted, that less than the average 
number of city houses has been built, but the growth of towns and villages 
has been great beyond all former precedent. Look to 'the coal and 
iron regions — to the oil region of the Ohio and its tributaries — and to 
the wonderful mineral one beyond the Mississippi, and you will find that 
there have been there created homes for millions of men, their wives and 
children. Little cotton machinery, it is true, has recently been built, 
but we have more than doubled our power to produce both wool and 



13 



woollen cloth. Rolling mills now exist, capable of furnishing annually 
150,000 tons of bars, while the power by means of which those bars may 
be converted into ships, engines, and other machinery of transportation 
and production has more than doubled, and has, probably, even trebled. 
Factories have been created capable of supplying almost the world's 
demand for various instruments of production or defence ; sewing machines 
on the one hand, pistols, rifles, and Parrot guns on the other. The quartz 
mills have been created to which we are now, as we are assured, to look 
for an immediate production of the precious metals to the annual extent 
of $200,000,000. For every engine five years since there are now, as I 
think, more than three at work. Throughout the vast fields of the West 
machines are everywhere doing the work that five years since was done 
by human hands. Fewer miles of railroad may have been constructed, 
but the rolling stock of all has been so much increased that the power of 
transportation throughout the loyal States has more than doubled. St. 
Louis presents to-day, as we are told, an amount of steam tonnage two- 
fifths greater than there existed before the war; and yet, so great has 
been the quantity of produce seeking to go to market that the Pennsyl- 
vania Central, at Pittsburg, has recently been blocked by 2500 loaded 
cars, for the movement of which no power could be furnished. Look, 
then, in what direction we may, whether to the greater or smaller ma- 
chinery of production, we witness an increase of quantity so great as fully 
to warrant us in the belief that, leaving wholly out of view the sums 
invested in loans to cities, counties, States, and to the general govern- 
ment, at no period has the power of accumulation been much more than 
half as great as it has been shown to be in the years of the great war 
that has now so happily terminated. 

For all these successful results we stand indebted to the combined 
action of two great measures of the administration ; first, the adoption 
of a national free trade system, by aid of which producers and consumers 
were to be brought to act together ; and second, the adoption of a na- 
tional system of circulation based entirely on the credit of the government 
with the people, and not liable to interference from abroad. Both were 
needed, and neither one could, without the other, have been productive 
of the great results that have been achieved. To the latter of them, how- 
ever, you object, on the ground that it has caused an unnatural and in- 
jurious rise of prices ; that it has lessened the disposition to exertion ; 
and that it tends now to cause great diminution in the productive industry 
of the community. To all this I answer that, when carefully examined, 
the facts do not seem to me to sustain these objections, and that such is 
certainly the case I propose in my next to show, meantime remaining, 
with great respect, Yours, very truly, 

HENRY C. CAREY. 

Philada., Jan. 30, 1866. 



LETTER THIRD. 



Dear Sir : — 

Before proceeding to inquire into the changes of price so generally 
attributed to that "plethora of paper-money" of which you have spoken, 
it may be well to determine what, precisely, they recently have been. 
To that end, I give you here the actual prices of the New York market, 
as just now furnished by the Merchants' Magazine, for the closing week 
of the year which preceded the joint inauguration of Mr. Lincoln and 
of a national free trade policy, and for the corresponding week of the 
several years that since have passed, as follows :— 





IS 


180. 


lMil. 


1SG2. 


1S63. 


1864. 


1865. 


Ashes . . . . 


$5 


00 


$6 25 


$8 


50 


$8 50 


$11 


75 


$9 


no 


Flour, State . . . 


r f 


35 


5 50 


6 


05 


7 00 


10 


00 


8 


75 


Wheat, red . . . 


1 


38 


1 42 


1 


48 


1 57 


2 


45 


2 


05 


Corn 




72 


64 




82 


1 30 


1 


90 




95 






00 


77 




85 


1 45 


1 


55 




75 






25 


20 




23 


33 




40 




50 


Hemlock leather . 




30 


20 




27 


30 




42 




36 






75 


65 




85 


1 30 


1 


15 


1 


10 


Pork, old mess . . 


16 


00 


12 00 


14 


50 


19 50 


43 


00 


28 


50 


Beef, city mess 


6 


00 


5 50 


12 


00 


14 00 


20 


50 


20 


00 






8 


6 




8 


11 




20 




16 






10 


8 




10 


13 




23 




19 


Butter . . . . 




18 


19 




22 


29 




55 




48 


Cheese . . . . 




10 


7 




12 


15 




20 




18 


Tallow . . . . 




10 


10 




10 


12 




18 




14 




$37 


21 


$33 63 


846 


17 


$56 05 


$94 


48 


$73 


11 



From this list have been excluded cotton and naval stores, both of 
which, during the blockade, were so very high and have since so greatly 
fallen. For special reasons, however, many of these very articles might 
with equal propriety have been omitted. Of wheat, for instance, the 
crop of the last year was less by 12,000,000 bushels than that of 1864, 
that itself having been less by 16,000,000 than had been the one of 1863. 
This, of course, largely affects the present prices of both wheat and 
wheaten flour. Butter and cheese are higher than they would otherwise 
be, because of the very considerable diminution in the number of cows 
exhibited in the recent Report of the Commissioner of Agriculture. A 
corresponding diminution in the number of cattle generally, coupled with 
the existence of a cattle plague throughout a large portion of Europe, 



15 



accounts for an increase in the prices of both beef and pork.* Allowing 
for all these circumstances, I would now, my dear sir, most respectfully 
beg you to reflect on the answers that might properly be given to the 
following questions, to wit : — 

First. Comparing present prices with those which ruled before the war, 
is there here exhibited any increase that might not have taken place had 
there been no change whatsoever in the circulation ? 

Second. Making the same comparison, and allowing for the fact that 
from the increased prices of 1865 is to be deducted the increased rate of 
freight, most of which has been rendered necessary by the heavy taxation 
of coal, iron, cars, engines, receipts, dividends, &c. &c, would the western 
farmer, except for the accidental circumstance of a deficient supply of 
wheat occurring simultaneously with the existence of a cattle plague 
abroad, receive to-day even as much in paper as he had before in gold ? 

Third. Leaving wholly out of view, with the single exception of a 
cattle plague occurring simultaneously with a diminution in our own 
supply of cattle, all of the circumstances above referred to, would there, 
in the prices current, now be found as great a change for the better as 
we should have been warranted in expecting from the creation of that 
great internal commerce which had resulted from the adoption, in 1861, 
of a policy having for its object the bringing together of the producer 
and the consumer, to the great advantage of both ? 

Fourth. Is there to be found in the above exhibit any evidence that 
the farmer now profits of the events of the past few years even to such ex- 
tent as is absolutely required for enabling him to continue payment of the 
heavy taxes, local and national, now imposed ? 

Fifth. Must not any attempt at further forcing down prices, with a view 
to compelling export of our products in exchange for gold, be followed 
by inability to pay the taxes and by financial and political ruin ? 

Sixth. Do not all the facts above given show clearly, that what we 
really need is such a stimulation of the societary circulation as would cause 
that increased demand for all the products of the farm which would main- 
tain their prices and diminish the necessity for employing our people in 
that which is the proper work of the barbarian and the slave, and of 
them alone, to wit, that of raising raw products for the supply of distant 
markets ? 

Throughout the period of Mr. Lincoln's administration that circula- 
tion was active to an extent never before known in any country of the 
world, and to that activity, as has been shown, have we been indebted for 
power successfully to prosecute the war. How we have been indebted to 

* So much has the demand for beef exceeded the supply, that, notwithstand- 
ing large imports from Canada, the number of cattle and oxen reported by the 
Commissioner of Agriculture is now nearly a million less then it was six years 
since. 



16 



increase in the supply of the medium of circulation for promoting that 
activity, and thus enabling us to supply the thousands of millions rendered 
necessary by the war, has been also shown. What have been the pre- 
cise facts connected with the change of prices above exhibited I propose, 
in my next, to show, and have now to ask for them your careful considera- 
tion. Meanwhile, my dear sir, permit me here to say a word or two in 
regard to my own position. Throughout the war I have been a heavy 
sufferer under the legal-tender system, having been, as I still am, com- 
pelled to accept paper in place of the gold that honestly was due me, 
and to pay double or treble price for almost everything I required to 
purchase. My apparent interests are, therefore, all on the side of an 
early return to specie as the standard, but well do I know that my real 
interests are so closely bound up with those of my neighbors that what 
must be bad for them cannot be good for 

Yours truly and respectfully, 

HENRY C. CAREY. 

Philadelphia, February 3, 1866. 



LETTER FOURTH. 

Dear Sir : — 

At the close of 1860, the " paper money" circulation of the loyal States 
amounted to $150,000,000. Adding to this the precious metals then in 
actual use, the total circulation cannot materially have exceeded $250,- 
000,000. 

The following summer witnessed a withdrawal of nearly the whole of 
the Western circulation consequent upon losses caused by the rebellion. 
The precious metals were still in use, but the tendency towards hoarding had 
greatly grown, and the total circulation, even after the issue of $50,000,000 
of Treasury notes authorized by the law of July, 1861, had at the close 
of the year certainly much diminished.* The consequences of this exhibit 
themselves in the table heretofore given, in a reduction of about 10 per 
cent, in the sum of the New York prices, equivalent to at least 25 per 
cent, in those of the West. 

The Act of February, 1862, authorized the issue of legal tender notes 

to the extent of $150,000,000 

That of July, 1862 . 150,000,000 

Adding now to this for the bank notes in circulation . 100,000,000 

We have at the close of the year a total of . . . $400,000,000 



* Even as late as December, 1862, the State bank circulation, as given in the 
annual report, was but $97,000,000. 



IT 

exhibiting an addition of scarcely less than 60 per cent. ; and yet, the 
increase in the sum of prices, as has been shown, was but from $37.21 
to $46. IT, or $8.96; and of this trivial augmentation two-thirds are 
seen to have resulted from an increased demand for the beef required 
for supplying the hundreds of thousands of men engaged in the effort at 
maintenance of the Union. There is, certainly, here no difference that 
might not as readily have taken place under a moderate extra demand 
from abroad, had the circulation remained entirely unchanged. 

In March, 1863, there was authorized a further emission of legal ten- 
der notes, the amount of which was now to be carried up to $450,000,000 
The fractional currency issued may then have reached 20,000,000 
The State bank circulation, as returned to the Comp- 
troller, was $147,000,000, to which must now be 
added that of the banks from which no returns had 
been received, giving a total of probably not less 

than 155,000,000 

National bank circulation probably .... 5,000,000 
To which must here be added interest bearing legal ten- 
ders issued in the last quarter of the year, and all 
then in circulation among the people, estimated at 60,000,000 



Total circulation Dec, 1863 $690,000,000 

In three years the circulation had thus almost trebled, and with what 
effect on prices ? The $37.21 of the dull and lifeless period which fol- 
lowed the election of Mr. Lincoln had been replaced by the $56.05 of the 
period of life and animation of December, 1863, showing an aggregate 
difference of $18.84, nearly two-thirds of which are found in the two arti- 
cles of beef and pork, the army demand for both of which had been so 
immense. Here again there is found no increase that, under circum- 
stances otherwise similar, might not properly have been looked for, had 
gold remained the standard. 

With 1864, we have no increase of circulation except that which re- 
sulted from additional issues by State and National banks. What was 
the extent of the former I have no means of knowing, but see no reason 
for believing that it was very great. Of National bank notes, the total 
quantity supplied to the first of October had been $65,000,000; but, as 
shortly after stated in your annual Report, they were "to a considerable 
extent" merely a substitution of National for State currency. In all 
cases, the institutions receiving notes found themselves compelled by law 
to retain on hand one-fourth of the amount in legal tenders, which were 
thus withdrawn from circulation, and constituted an offset so large as 
almost to neutralize the issues to the new banks that had been then 
created. The interest bearing legal tenders may somewhat have in- 
creased, but, having been steadily withdrawn from circulation as they 
2 



18 



grow in value, the increase cannot have been very great. Further than 
this, the high price of gold having withdrawn from it all the private 
hoards of the country, the hoarding of " greenbacks" had not only now 
commenced, but had made such progress as to constitute an important 
element in the estimate here, for the close of the year, to be made of the 
" paper money" then outstanding. Allowing for all these circumstances, 
the highest estimate of the circulation that could now be made would 
scarcely, as I think, exceed $750,000,000, giving an increase of 60 mil- 
lions, or from eight to nine per cent. 

In the mean time, however, the field throughout which this "paper 
money" was to be diffused had greatly been enlarged. At the close of 
1863 there had been, except near New Orleans, scarcely a foot of ground 
south of the Potomac, the Ohio, or the Missouri, that was securely held; 
and of the expenditures in the field by far the larger portion was being 
made at points that were but very little further southward. Now, how- 
ever, all had changed, the seat of war having been transferred to the 
vicinity of the James, the Alabama, and the Savannah. Adding to this 
the fact that the States of Colorado, Nevada, and Montana were being 
rapidly created; while Nebraska and Minnesota were as rapidly increas- 
ing in the numbers of their population; it will be seen that the surface 
over which a medium of circulation was required must have been, to say 
the least of it, one-half greater than it had been at the close of the pre- 
vious year. Making now allowance for all these facts, it is, as I think, 
safe to say, that the proportion borne by circulation to the need for it, 
had in tint year been diminished at least a fourtli ; and yet, within that year 
the S.M7.21 of 1*60, and the $56.01 of 1863, had become the $94.45 of 1864. 
Thus are we presented with the extraordinary facts, that while the circu- 
lation was being increased prices had but slightly risen; whereas, now, 
when, in practical effect, it had been materially reduced, they had risen 
with great rapidity ; showing, and very clearly, as it appears to me, that the 
extraordinary changes we recently have witnessed have not been caused 
by increase of circulation, and that it is not in the direction of its dimi- 
nution that we are to look if we desire to bring about resumption. 

The real cause of all this extraordinary rise, in the face of a diminution 
in the proportion borne by circulation to the need for it, is found in the 
following paragraph of the Comptroller of the Currency, to wit: — 

" By a gold valuation of our imports and exports, the balance that has 
accrued agaiust this country during the four years previous to the 30th day 
of June last, including the interest on American securities held abroad 
purchased within that time, and also taking into due consideration the 
difference between our own standard and that of foreign gold (9| per 
cent.), has been $308,000,000." 

This, of itself, would be sufficient to account for all the rise of gold, 
and rise of " paper money" prices, that occurred in 1864 ; and yet, thereto 



19 



must now be added a sum almost, if not even quite, as large, for covering 
the expenditures of our travellers in Europe ; the interest on stocks and 
bonds held in Europe before the war; the freights, and the undervalua- 
tions of imports. It is safe, as I believe, to estimate our expendi- 
tures abroad as having exceeded our exports to the annual extent of 
$150,000,000, or, in the whole, $600,000,000. The only commodity in 
which this balance could be paid was gold, the price of which naturally 
rose until it had so thoroughly emptied all the hoards of the country, 
public and private, that scarcely any now remains except what is indis- 
pensably necessary for the payment of interest by, and of duties to, the 
Government. 

It fell with the opening of southern ports and the emancipation of 
cotton, and with it fell, too, the prices of each and all of the commodi- 
ties in the list above presented. Is there, however, to be found any 
evidence that the "plethora of paper money" had controlled the 
prices of our various products ? None, whatsoever ! On the contrary, 
the changes are precisely such as must, under similar circumstances of 
supply and demand, have occurred had the idea of a legal tender note 
had no existence. The total difference between the sum of the prices of 
1860 and 1865 is $35 90, of which three-fourths, even, are here found in 
the articles of pork and beef, leaving but $9 40 for all the others. Hay, 
for " paper money" is cheaper than when it was payable in gold. Wheat 
commands now far more gold than it did in 1864. Why ? Because the 
crop proved short ! Butter remains high because cows have become far 
less numerous. Oats are scarcely higher than they were five years since. 
Corn has fallen to half the price of 1864, because the crop has been very 
large. Such are the results, when we compare the New York prices, 
increased as they are by the present enormous charges for transportation, 
but when we look West, we find that corn is being used for fuel, while 
wheat is in some places selling at 40 cents, and oats at only eight ! That 
such prices must, in a great measure, deprive the western farmer of power 
to contribute to the Federal revenue would seem to be very clear; yet is 
there an unceasing cry for further reduction, that cry coming, too, chiefly 
from men who are most urgent for "thorough taxation," speedy resump- 
tion, and prompt discharge of the public debt ! Could the editors to 
whom we are indebted for such advice be persuaded to study carefully 
the facts above presented, they could scarcely, as I think, fail to see that 
further travel in that direction must lead to public bankruptcy, political 
revolution, and a perpetuity of " paper money" as the exclusive medium 
of circulation. 

That " paper money" is democratic in its tendencies may readily be 
seen by all who study the fact that it is scarcely at all used by the great 
operators in foreign merchandise of whom you have spoken, or by the 
stock board operators to whom you yourself, my dear sir, have referred. 



20 



Thousands of millions pass and repass among such people without the 
aid of a single note ; whereas, among the small operators of our cities — 
the workmen of our factories — the laborers in our fields — the farmers and 
miners of the West — there exists an absolute necessity for a letter of 
credit, in the form of a bank or treasury note, to be used on the occasion 
of each and every exchange of commodities or services that is made. A 
war upon what is called " paper money" is therefore a war upon the poor 
in favor of the rich; and that the war being made upon it has pre- 
cisely that effect is proved by the fact, that the western farmer is now 
being impoverished by reason of such a reduction in the price of corn 
and oats that the former is being used as fuel while the latter is being 
sold at 8 cents per bushel, housus and lots in the neighborhood of Wall 
Street commanding at this moment prices such as had never before 
been heard of. That such a war can have no end other than that of 
political revolution the most complete is so absolutely certain that, re- 
garding as I do the future of the country and that of the administration 
as being inseparably linked together, I feel it a matter of positive duty 
most respectfully to ask that you should once again examine this question 
with a view to satisfying yourself that at no time in our history has there 
existed any such " plethora of paper money" as that of which you speak ; 
and, that the supply of the medium of circulation is not only not in excess, 
but is, at this moment, so far below the real needs of our people that any 
attempt at further reduction must be attended with financial and political 
dangers of the most serious kind. 

In another letter I propose to show what are the relations between 
"paper money" and societary force, and meanwhile remain, my dear sir, 
very respectfully and truly, 

Yours, 

H. C CAREY. 

Philadelphia, February 5, 1866. 



LETTER FIFTH. 

Dear Sir : — 

Of all the phenomena of the physical world there is none so wonderful, 
none whose action is so entirely beyond the reach of observation, as is 
that of electricity. At times it makes its existence manifest, as when it 
performs the very trivial act of shattering a tree or destroying a life ; but 
when engaged in the wonderful work of aiding in the production of uni- 
versal vegetable and animal life, its operations are so entirely invisible to 
the eye that few among the thousand millions of the population of the 
earth could, even now, be induced to believe in its existence. 



21 



As it is with electricity in the physical world so is it with money in 
the social one, the vigor and importance of its operations being in the 
inverse ratio of the manifestations of its existence. At every purchase 
and every sale of the thousands of millions of sales and purchases made 
in the higher commercial ranks of a great city, the money passes, yet is it 
never seen. Passing downward we find, at each successive stage of the 
descent, the manifestations of its existence becoming more abundant, 
as the operations become more trivial, the letter of credit " greenback" here, 
and bank-note there, becoming more and more required in every ex- 
change of labor or its products. Arriving at the lowest stages, we find 
ourselves among a people indisposed to use these latter for even the small- 
est sums, and greatly preferring the copper coin to the three or five cent 
note — the diminutiveness of the exchange keeping steady pace with the con- 
stantly growing materiality of the instrument required for its performance. 

So precisely is it as we pass from our great and populous cities towards 
those regions of the West in which States are being formed whose total 
population scarcely exceeds that of single wards of Philadelphia or New 
York, the societary movement becoming at each and every step less and 
less rapid, and the necessity for a material representative of value more 
and more urgent, until at length we reach those regions in which, to the 
present hour, no bank has yet been tolerated — no "greenback" used for 
purposes of circulation — and perhaps no contract made that could be 
otherwise redeemed than by actual delivery of the precious metals. As 
a consequence of this it is, that while cheapening gold throughout the 
world, the price there paid for the use of machinery of circulation is 
higher than in any other community of the world claiming to rank as 
civilized. The societary movement of the distant West is therefore, in 
this respect, nearly on a par with that of the lowest and least productive 
portion of our city population, credit, circulation, and the substitution of 
mental for muscular power, travelling always hand in hand together, and 
thus producing increase of societary force. 

The substitution of circulating notes for coin constitutes an important 
step in the progress of civilization ; and yet, a further and more import- 
ant one would still remain, to wit : that of so elevating the whole popu- 
lation of a country as to enable the little people, those who work, to do 
as do those great ones who profit of their labors, performing all their ex- 
changes without the aid of any material representative of the money to 
be paid.* That, of course, could never be accomplished, and the idea is 
here suggested merely with a view to calling you attention to the fact, 
that it is in that direction lies the road towards real civilization. Sufficient 



* In no part of the world is this so nearly accomplished as in New England. 
Nowhere does there exist in such perfection the machinery of circulation. No- 
where is it obtained at so small a cost. 



22 



will it be for ns if we shall take the first great step by bringing up our 
whole people, the near and the distant, the inhabitants of Atlantic cities 
and western territories, to a full comprehension of the advantage to be 
derived from the steady and regular use of the letter of credit known to 
the world as the " greenback ;" or that other one known as the national 
bank note. At times, the feeling of a necessity for this has produced an 
effort in that direction as when, in I<s35, the paper circulation had reached 
$100,000,000; and again, in 1856, had attained to double that amount, 
to be, however, in both cases followed by collapse and ruin. Why was 
this? Because of an excess of circulating notes? Assuredly not, for, 
with a widely scattered population whose need for a tangible repre- 
sentative of money was then thrice greater than that of the European 
manufacturing nations, the amount in actual use was not even one-third 
as great, per head, as that we see to be required in both France and Eng- 
land. The real cause of the fearful changes to which you have referred is 
found in this, that, while requiring our people to regard the precious 
metals as the basis of all their contracts, we had overlooked the one great 
fact, that those metals travel always from semi-barbarous countries to those 
which are civilized ; from those in which the rude products of the earth 
are cheap, to those in which they are dear \from those whose people, like 
our own, are employed in selling their soil in the forms of corn and 
cotton, to those which bring from abroad rude products and thus enable 
themselves to create a real agriculture; and from those in which labor 
is performed by the unassisted human arm, to those in which coal and iron 
ore are so utilized as to give to each and every individual the service of 
willing slaves who do the work, requiring in return neither meat nor drink, 
neither clothes nor shelter from the weather. The raising of raw products 
for distant markets is the proper work of barbarous communities, and none 
such has ever yet, nor ever will, maintain a specie circulation. 

The collapses came in 1837 and 1857, and with what effect? Who 
were they that then most severely suffered ? Was it not the people of the 
West, from whose midst the circulating note so wholly disappeared, 
driving them back to that barter system from which they but then had 
made an effort to escape ? Who profited ? Was it not the wealthy of 
our cities, in whose hands then centred nearly all the circulating 
medium of the country ? Assuredly was it so, and thus were the rich of 
the East made richer while the poor of the West were made poorer than 
they had been before. With the opening of the rebellion there came, 
throughout almost the entire West, a third collapse, and with precisely the 
same results, ruin to the man who was in debt, and increase of w T ealth to 
the already wealthy owner of New York and Boston lots and houses. 

Now again has there been made a great effort towards enabling our 
western friends to accomplish that great step on the road towards civiliza- 
tion which consists in substituting letters of credit for material money, 



23 



thereby imitating, in a very small degree, the mode of operation of the 
great men, and great centres of the world ; the work this time having 
been undertaken by a corporation of whose solvency none could doubt, 
offering, as it did, a mortgage on the whole property of the Union as 
security for the performance of its engagements. With what effect on 
this occasion ? With that of stimulating the societary action to a degree 
that in all the world had never before been known, and so stimulating 
production as to have enabled us not only to lend to the Government 
thousands of millions ; not only to make to it donations of service and of 
commodities to an amount scarcely less than $200,000,000 a year ; but 
simultaneously therewith to add to the wealth of the country to an extent 
that finds no parallel in the records of mankind. 

Such a result, my dear sir, might have been expected to bring with it 
an almost universal conviction that we had at last stumbled upon the 
real road to progress ; that in a great deficiency of the machinery of cir- 
culation had been found the essential cause of many of the most serious 
difficulties of the past ; and, that it would be desirable to proceed on- 
ward in the same direction, stimulating production and gradually placing 
our people in a position to accumulate such a store of the precious metals 
as would enable each and every man to determine whether to content 
himself with individual promises such as, in the great marts of com- 
merce, have now so entirely superseded the circulating note — to demand 
the note — or, still further, to insist upon the delivery of the coin itself. 
Such is the point at which we should desire to arrive — such the one at 
which we should arrive, could our people but be persuaded once to see that 
the substitution for coin of the circulating note is one of the evidences 
of advancing civilization ; that its convertibility into coin is dependent 
on the maintenance of a system that shall cause the inward current of 
the precious metals to exceed the outward one ; and, that to attempt 
resumption in face of a system that not only makes demand for all 
the produce of California mines, but year after year adds hundreds of 
millions to our foreign debt, is a course of action that must result in 
financial revulsion, to be followed by political revolution the most complete. 

Journalists, however, my dear sir, tell us that circulating notes cause 
speculation ; that speculation causes men to travel about when they should 
be in the field or workshop ; that if we would stop this " speculation" 
we must rid ourselves of the "plethora of paper money" under which we 
are supposed to suffer ; and, that the way towards financial and political 
salvation is to be found in sending abroad bonds with which to purchase 
such supplies of the precious metals as will enable each and every man to 
determine for himself the sort of money in which he will be paid. 

What, however, is this " speculation" that is the cause of so much 
evil ? The lad going forth from school " speculates" with himself whether 
it will be best for him to become a farmer or a trader. Arrived at man's 



24 



estate, he "speculates" as to whether he can be best employed in mining 
coal, making cloth, smelting iron ore, sinking shafts, building mills, erect- 
ing furnaces, making roads, or buying treasury bonds. These things he 
does only after carefully " speculating" as to the direction in which he is to 
look for the largest return to his labor or his capital, or both. He is 
speculating for a rise, as is every employer of capital, every really useful 
man amongst us. He desires that money may be abundant, and that the 
charge for its use may be small. With that class of speculators — farmers, 
laborers, mechanics, manufacturers, road makers, and others — the Na- 
tional treasury has been allied throughout the past few years, and from 
that alliance has come the power successfully to prosecute the great war 
that has just uow closed. To those " speculators" stand we now indebted 
for the facts, that our railroad facilities are twice greater than they were 
five years since ; that our furnaces are capable of producing more than 
1,200,000 tons of iron, and our rolling mills annually 750,000 tons of 
bars ; that houses have grown in number in full accordance with the 
growth of popnlation ; that oil wells have been developed capable of sup- 
plying the home demand and giving us annually 30,000,000 of gallons 
for export; that the supply of food has grown from less than a thousand 
millions of bushels, to more than twelve hundred millions; that the sup- 
ply of wool has grown to more than a hundred millions, woollen mills 
having meanwhile grown to such extent as still to need from abroad large 
supplies ; and, that in almost every department of manufacture we have 
made in the midst of an expensive war, a progress such as is without 
a parallel in the whole history of the world. Such having been the 
works of speculators for a rise, is it, my dear sir, possible to feel surprised 
that the alliance between them and the treasury which subsisted through- 
out the whole period of Mr. Lincoln's administration, should have proved 
to the latter so highly advantageous ? 

There is, however, another class of men, who, while building no houses, 
making no roads, opening no mines, erecting no furnaces, stand always 
ready to purchase them at the sheriff's hands. These men, being specu- 
lators for a fall, desire that money may be scarce and interest high ; and 
with them it is that the Treasury, wholly unintentionally on your part 
as I am very certain, is now allied. With them, too, if Sve may judge 
from the bill that is now before the House, it seeks to form a still more 
close alliance. It is, however, the alliance with sin and death, and can 
lead to no result other than that of financial and political ruin. Worse 
than to Hercules was the poisoned shirt of Nessus has at all times proved 
the contact with such men. Worse than in any other nation it has ever 
been, must it prove with us. 

The consequences of this alliance exhibit themselves in the facts that 
while, on unquestionable security, money abounds and is very cheap in 
Wall Street, it is very dear to all who seek to use it in any manner likely 



25 



to increase production. Railroad stocks and bonds are cheap. City 
bonds, paying six per cent, interest, sell at 90 per cent. Cities pray to 
be permitted to pay T per cent. Treasury bonds, paying in gold 6 per 
cent., command in market less than par. Scarcity of money presses into 
market the seven-thirties, men who helped the government in the day 
of its need now finding themselves compelled to sell at heavy loss, thereby 
aiding in building up the fortunes of those who throughout the war have 
"speculated" for a fall, and have witnessed with regret the triumph of 
loyalty over treason that has been secured. Step by step, with every 
movement in this direction, the societary movement becomes more slug- 
gish, with steady increase in the number of men who seek employment 
and cannot find it. 

Simultaneously with decline here in the demand for labor comes advice 
from Illinois, that so low has fallen the price of food that farmers are 
"holding indignation meetings," at one, at least, of which, it has been 
proposed to plant in the coming season but half the land that had been 
planted in the years that have lately passed. Paralysis of the farm 
goes thus hand in hand with that of the workshop, and must result in 
paralysis of the party that has so successfully made the war, and that now 
requires of us that we should do that which no other nation ever yet has 
done, to wit: maintain a specie circulation while exporting little or 
nothing beyond the rudest products of agricultural and mining labor. 

Cheap money — low interest — enabled our working men to prosper, 
built up that party, carried us through the war, and gave us our present 
position before the world. That dear money— high rates of interest— 
will swamp both the party and the country, is the firm conviction of, my 
dear sir, Yours very respectfully, 

HEXRY C. CAREY. 

Philadelphia, February 5, 1866. 



LETTER SIXTH. 

Dear Sir : — 

The farmer having throughout the war given his own services, thereto 

adding perhaps the life or lives of his son or his sons, to his country's 

cause finds, now that victory has been achieved, that he is compelled 

to accept for his oats 8 cents, and for his wheat 40 cents, while corn so 
much abounds that burning it has become more advantageous than 
carrying it to market. Seeking the cause of this, he turns to journals 
eminent for their Republicanism, there to find that there exists a " ple- 
thora of paper-money;" that the prices of food are too high to permit 



26 



that it should go abroad in search of gold by help of which to achieve 
resumption; that he and his neighbors have become "speculators;" and 
that the way to salvation for the country lies through such a war upon 
this "paper-money" as will have the effect of compelling his neighbors 
and himself to sell their food and their wool at prices to be fixed by 
other "speculators" in Chicago or Cincinnati, representatives of great 
capitalists of New York or Liverpool who have not only withheld from 
the government all aid, but have given their best efforts for accom- 
plishing the dissolution of that Union in whose behalf he has made 
such heavy contributions. Severely feeling the effect of this, he applies 
to the Republican editor for a corresponding reduction in the price of 
his journal, receiving for answer the assurance that paper, wages, taxes, 
and rents remain so very high, that war prices must continue to be main- 
tained. Asking next for a reduction of his taxes, he learns that the 
public debt is large; that the interest is great; that the people who have 
lent greenbacks when gold was at two and a half for one are anxious for 
such a fall of prices as may enable them to double their consumption of 
food and clothing; that the public debt must be diminished; and that, 
for all these reasons, the full war rate of taxation must not only be main- 
tained, but may be much increased. — Unable to sell his corn, he seeks to 
convert into money the certificate he holds as representative of little 
savings placed in the public funds at a time when necessity compelled 
the Treasury to court the aid of little people like himself, but finds that 
he can do so only at a loss of two, three, or even five per cent. Failing 
here, he seeks to borrow the trifle that he needs, but receives for answer 
that, money having become so scarce as to have raised the Chicago rate 
of interest to two per cent, per month, it is no longer to be lent in the 
country at any price. — Seeking to buy a shirt, he finds that prices have 
but slightly fallen. Inquiring the cause of this, he learns that cotton 
manufacturers are making profits that are almost fabulous. Why, then, 
he inquires, do they not increase the number of their mills ? To this he 
receives for answer, that the men of enterprise throughout the country 
have had positive Republican assurance that the "plethora of paper- 
money" shall be brought to an end; that the price of food. shall be made 
to fall ; that labor shall once again be cheap ; and that, under such cir- 
cumstances, none dare now to risk the building of either mills or furnaces. 

The laborer, too, finds that since the day on which he volunteered his 
services for the war great changes have been brought about. Then, there 
were two men ready to purchase service where there was but a single one 
seeking to sell it. Now, however, all has changed, the sellers having 
become more numerous than the buyers. His wages having fallen, he 
seeks reduction of his rent, instead of which he receives notice that it has 
been advanced. Inquiring the cause of this, he learns that there has 
been, and is, a "plethora of paper-money;" that food and wages have 



2? 

been too high ; that contraction is the order of the day, and that prices 
must be reduced; and that, until they shall have been so reduced, none can 
risk their means in building either houses, mills, or furnaces. " Specu- 
lators," as he is assured, have already built more furnaces and rolling- 
mills than are now required. " Speculators" have brought into cultivation 
so much land, that corn can no longer find a market. "Speculators" 
have sunk so many wells, that the price of oil has greatly fallen. "Specu- 
lators" have made so many roads, that railroad stocks have become mere 
drugs in the market. " Speculators" have taken so many treasury bonds, 
that they can no longer hold them. "Speculators" for a rise— working- 
men — men who employ money— those who have carried the country 
through the war— have been becoming too independent. The time, as he 
learns, has now arrived for those who " speculate" for a fall— for those 
who have money to lend— those who have not helped the government in 
its time of need— those who are to reap the harvest when the "plethora 
of paper-money" shall have ceased to exist, and when we shall have 
returned to those "good old times" of the Buchanan administration, 
throughout the whole course of which the Treasury could never have 
commanded the use of a single hundred millions at any reasonable rate 
of interest. 

At all this the wealthy capitalist rejoices, receiving ten or twelve per 
cent, where before he had only five or six, and buying at heavy discounts 
the bonds of those who had helped the government when its existence 
had been most endangered. 

The wealthy manufacturer goes on his way rejoicing in the idea that 
the danger of increased domestic competition has passed away. 

The receiver of fixed income rejoices in the idea that decline in the 
price of gold now enables him to live abroad and profit by the lower 
rents and lower prices of continental Europe. 

The British manufacturer rejoices in the knowledge that he is from day 
to day becoming more and more "master of the situation," and more and 
more enabled to dictate the prices at which he will buy, and those at 
which he will sell.* 

The Copperhead, knowing well that to an activity of circulation without 
parallel in the history of mankind the government has been indebted for 
power to make the war, now rejoices in the gradual spread of a, paralysis 
that in every stage of its progress is more and more preparing tax-payers 
to seek a change of rulers. 

Throughout the war, as has been shown, the National Treasury had for 



* " We know of manufacturers in the linen trade who have been making as 
much as £1,000 per day in goods chiefly for the American market, and such was 
the demand for their goods that they were masters of the situation, and in the 
matter of terms they naturally dictated their own." — Sheffield Iris, Jan. 12, 1866. 



28 



its allies the men who worked — those ivho sought to rise — those to whom it 
was desirable that money should be cheap ; and to that alliance have we 
beeu indebted for all our past success. Now, the alliance is with those 
who do not work — those who, having risen, have money to lend — those 
who desire that food and labor may be cheap, and money dear. To the 
former we have stood indebted for power successfully to make a war 
unparalleled in its demands for blood and treasure, and for the existence 
of a faith in our future such as had never before been witnessed in any 
country of the world. To the latter stand we now indebted for the facts 
that faith in the future is gradually passing away ; that the burthen of 
taxation is becoming more and more severe; and that preparation is now 
being daily made for a financial and political revolution that must result 
in causing us to forfeit all the advantages that, in the brief period of Mr. 
Lincoln's administration and at the cost of so many thousand millions, 
had been acquired. 

Believing that careful examination must result in satisfying you that 
without a change of system the hopes of those who have opposed 'the 
government, and the worst fears of those who have throughout sustained 
it, must all be fully realized, I remain, my dear sir, with great regard, 

Yours, very truly, 

HENRY C. CAREY. 

Philadelphia, Feb. 8, 1866. 



LETTER SEVENTH. 

Dear Sir : — 

On a former occasion it was shown that the tangihle machinery of ex- 
change of France was in the ratio of $30 per head, and that of Great 
Britain in that of $25 ; whereas with us it now stood at not over half of 
this latter quantity. When, however, we come to compare it with the 
surface over which such machinery is needed to be used, we find, as I pro- 
pose here to show, differences so exceedingly great as fully to warrant the 
assertion heretofore made, that no people other than our own could, by 
any possibility, have effected so large an amount of exchanges while 
having been allowed the use of so really trivial a quantity of the machi- 
nery by aid of which alone they could be made. 

Thirty years since the circulation of France, then altogether specie, 
was estimated at more than $600,000,000, or three thousand dollars per 
square mile. It now exceeds $1,000,000,000, or more than^ve thousand 
dollars per mile. At the first of these dates, her annual exports scarcely 
exceeded $100,000,000, or three dollars per head; but they since have 
nearly trebled. 



29 



In the same time the machinery of circulation of Great Britain has been 
so much improved that the necessity for the use of coin, or of any other 
tangible evidence of the existence of the power of purchase, has much 
diminished ; and yet, with every step in that direction there has been an 
increase of the quantity thereof in daily use. At the present moment it 
bears to the surface over which it needs to be used nearly the same rela- 
tions as does that of France, being certainly not less, and probably greatly 
more, than Jive thousand dollars per square mile ;* each successive stage 
of the increase therein having been accompanied by a growth of foreign 
commerce fully corresponding with that observed in France. 

Such being the facts, to what extent do they correspond with the teach- 
ings of the learned men who, following blindly in the steps of Hume, so 
confidently assure us that every increase in the quantity of money used 
tends to render a country worse as one in which to buy, though better as 
one in which to sell ? Do they not, on the contrary, prove directly the 
reverse of this ? Do they not show clearly that every increase of power 
to command the use of machinery of circulation is attended with improve- 
ment in the condition of a country, both as sellers and as buyers'? That 
such is the case can no more be questioned than can the existence of the 
facts, that light invariably follows the rising of the sun and absence of 
light his disappearance. Nevertheless, all our practice, as it is proposed 
now to show, has been in direct accordance with the teachings of learned 
Thebans who have thus far failed, and yet do fail, to recognize the ex- 
istence of the great principle, that the power of accumidation exists in the 
ratio of the rapidity of circulation. 

Looking now homeward we find that thirty years since, say in 1835-6, 
the quantity of circulating notes here in use did not exceed, and was 
probably considerably short of, $120,000,000. Adding to this the little 
specie then in use, we obtain an amount that certainly could not have 
much exceeded $H0, 000,000. The surface then wholly, or partially, 
occupied, was about 500,000 square miles, and the total circulation must 
have averaged about three hundred dollars per mile, or one-seventeenth oj 
that now used in France and England. Shortly before, by aid of a Na- 
tional free trade tariff, our public debt had been extinguished, but at that 
date the effect of a British free trade policy had commenced to exhibit 
itself in the cessation of all disposition to build mills, all effort at develop- 
ment of our mineral resources; and, in the purchase abroad, on credit, of 
the cloth and iron that should have been made among ourselves. One year 
later, our foreign credit having become exhausted, there arose a demand 
so great for the precious metals to go abroad, that banks were compelled 
so far to curtail their loans that, to avoid the production of an universal 

* A recent writer states the amount of the precious metals in actual use, and 
exclusive of that in the hank vaults, at $400,000,000. This would give a total 
circulation, per square mile, of more than $6,000. 



30 



bankruptcy, they themselves at length suspended payment. For all this, 
as we then were told by Mr. Van Buren, had we been indebted to a 
" plethora of paper money ;" whereas, we now most clearly see, that in 
actual amount it had been less than is at this moment the "paper 
money" of France, in which a note is rarely seen. Some years later, the 
precious metals having wholly disappeared, the total circulation of the 
country was but $60,000,000, the equivalent of three dollars and a half 
per head, or one hundred and twenty dollars per square mile of settled 
territory. As a consequence of this, the societary circulation had almost 
ceased, the laborer having been unable to find a market for his labor; the 
planter and the farmer having been compelled to sell their products at 
prices lower than had ever before been known; and the general rate of 
interest having meanwhile attained a point that till then had been almost 
unexampled. The sheriff expelled the landholder, and an outraged 
people followed suit by expelling that one of their Presidents who stands 
now in history as the man by whose advice had been commenced, and by 
whom had been carried out, the first of our crusades against " paper 
money;" that executive magistrate who bequeathed to his successor such 
a condition of the national treasury as made it necessary to send to 
Europe agents empowered to borrow money, not even a single dollar of 
which could be then obtained. 

Twenty years later, in 1S5G, the surface occupied having then been nearly 
trebled, the quantity of circulating notes in use amounted to $200,000,000. 
California hud, meantime, given us hundreds of millions of gold, nearly 
the whole of which had gone to Europe to pay for cloth and iron that 
should have been made at home. Some little had, however, here re- 
mained, and adding now that little to the circulating notes, we obtain a 
total of probably §300,000,000, the equivalent of $10 per head, or two 
hundred dollars per square mile. The $200,000,000 of foreign debt of 
Mr. Van Buren's day had meanwhile grown to $500,000,000, as a ne- 
cessary consequence of which our credit had become again exhausted. 
Banks then again stopped payment, and then again were we told that to 
a " plethora of paper money" had been all our troubles due. Now again 
did the internal commerce perish, the laborer finding himself unable to 
sell his labor, or to purchase food and clothing. Now again did the price 
of money rise to such a height as had scarcely before been known. Now 
again did the sheriff everywhere expel the farmers and the landholders. 
Now again, too, did the people expel a President who stands in history 
as the man who had aided and abetted Mr. Van Buren throughout his 
crusade against the democratic "paper money;" the one who, notwith- 
standing all the vast treasures that by California had been supplied, 
bequeathed to his successor a National Treasury without a dollar, and a 
public credit so impaired that on a mortgage of the whole property of the 
Union but the most trivial sums could, by any effort, be obtained; and 



81 



those too at a rate of interest so high as to be worthy of the weakest and 
most contemptible countries of Europe, and of them alone. 

Three years later, at the close of 1863, the circulation had risen to more 
than $600,000,000, the surface over which it was needed to be used hav- 
ing, because of secession, meantime declined to less than half. To the 
population of the loyal States it stood in the ratio of about $30 per head ; 
but to surface it was only six hundred per mile. As regarded the former 
it had risen nearly to a level with that of France and Britain ; but as to 
the latter, it yet stood, as compared with them, in the relation of but 
one to eight. The increase, as compared with 1835, had scarcely been 
greater than that of France and not a third as great when considered 
with reference to the growth of population ; yet had it so stimulated the 
societary circulation as to enable us not only to furnish to the government, 
as loans or revenue, nearly a thousand millions a year; but also to make 
to it donations to an extent that had never before in all the world been 
known — wealth and power meantime growing among our people with a 
rapidity so great as not only to have astonished ourselves, but also amazed 
the world. 

With the close of another year we arrive at the last session of Con- 
gress to find that body much embarrassed by the questions — First, as to 
how, with an empty treasury, to pay the hundreds of millions then required 
for discharge of its contracts with soldiers in the field, and with con- 
tractors at home who had supplied the food, the clothes, and the trans- 
portation that had so much been needed ; and second, how to guard our 
people against the dangers to which the internal commerce might find 
itself exposed on a sudden change from war to peace. Taxes on that 
commerce had been so heaped up that, in many cases, the foreign manu- 
facturer had been placed almost exactly on a footing with the domestic 
one; while in very many of them almost the only protection left consisted 
in the fact, that internal duties were payable in paper, while for those on 
imports gold was still required. Two causes for embarrassment being 
thus presented for consideration, it was needed that they should be so dis- 
posed of as carefully to protect both the people and the government 
throughout the long period that must intervene before Congress should be 
again assembled. In what manner was this done ? Let us see. 

The claimants on the Treasury did not demand payment. All they asked 
was, that Congress should authorize the Secretary to give to each and 
every of them promissory notes, payable at its own pleasure, and bearing 
no interest ; but of such a character as would facilitate their use for the 
support of families, and for the payment of debts. This they had a right 
to demand, and no honest man in private life could have ventured to re- 
fuse it. Congress, however, did refuse to grant the modest application, 
and for the reason that it feared that such a course of action might have 
the effect of raising the price of gold, that rise to be, perhaps, followed 



32 



by a general rise of other articles. Had it, however, studied the facts 
given by me in a former letter, it must have seen that there had really 
been very little change in the prices of our products other than that 
which it had been the object of the tariff of 1861 to produce, as a con- 
sequence of the creation of a great domestic market. Labor had been 
in great demand, and the laborer fully paid. All had had it in their 
power largely to consume, and the farmer profited of the liberal de- 
mands of the artisan, the loyal party of the north meanwhile profiting 
of the farmer's votes, and the country of the inducements thereby offered 
to immigration. Failing to see these things, and failing, too, to see that 
"honesty" was always "the best policy," Congress adjourned, leaving 
soldiers and their families, contractors and their creditors, to wait the slow 
process of borrowing money at high rates of interest; when, with a word, 
their demands could have been so discharged as greatly to have stimulated 
our internal commerce, while enabling the Treasury readily, and at low rates 
of interest, to obtain the balance. The erroneous and dishonest course of 
action then adopted now costs the country more than $20,000,000 in an- 
nual interest, its effect meanwhile having been that of causing a waste of 
productive power greatly larger than our present enormous revenue. 
Thus have the people been doubly taxed, with corresponding diminution 
in their power to aid the government ; and therefore it is that the Treasury 
finds itself now reduced to look to foreign hankers for the help so greatly 
needed. Of all the financial blunders ever made it stands now forth 
as one of the worst. Why it should have been made was that Congress 
then had, as few of our people have even now, no proper appreciation of 
the fact, that of all the commercial nations of the world our own is the one 
that is worst supplied with the machinery of circulation — that machinery 
for the use of which men are accustomed to pay interest. 

From that time to the present, the whole tendency of the national 
action has been in the direction of lessening the supply of that machinery 
and increasing the price paid for its use, the result now exhibiting itself 
in the facts, that while in the intervening period we have increased by 
one-half the number of people who need its services ; while we have more 
than doubled the surface over which it must be used ; while through- 
out the additional surface there is a total absence of such machinery ; we 
have by a full third reduced the quantity in use ; the present actual 
amount being but $460,000,000, the equivalent of $12 50 per head of the 
population, and of less than $300 per mile of wholly or partially occupied 
surface, the proportions being thus less than half of those above exhibited 
as having existed in the prosperous days of the close of 1863. 

How this is now affecting our internal trade is shown in the following 
figures exhibiting the receipts of free State produce at New York in the 
month of January for this and the two past years : — 



S3 



Ashes, bbls. 
Wheat liour, bbls. 
Corn meal, bbls. 
Wheat, bush. 

Rye, 

Oats, " 
Barley, " 
Peas, " 
Corn, " 
Pork, pkgs. 
Beef, " 
Cut meats, pkgs. 
Butter, pkgs. 
Cheese, " 
Lard, tcs. and bbls. 
Lard, kegs . 
Whiskey, bbls. . 
Petroleum, galls. 



The above is copied from a 
most urgent that the " greenback 



1864. 
1,399 
315,906 
35,699 
10,507 
5,657 
284,726 
63,603 
687 
160,039 
45,826 
28,384 
40,966 
40,028 
15,096 
10,658 
1,683 
36,802 
55,452 



1865. 

937 
173,451 
42,405 
5,819 
2,382 
219,469 
29,751 
5,131 
142,680 
36,326 
25,939 
18,024 
67,828 
25,018 
14,872 
94 
6,199 
41,694 



1S66 
540 
100,564 
26,954 
28,137 
2,405 
159,414 
35,532 
2,585 
178,651 
17,311 
3,261 
4,245 
42,413 
6,300 
10,167 
2,031 
7,383 
98,062 



journal whose editors have, of all, been 
" circulation should be withdrawn with 
a view to reduction of prices and extension of our power to supply with 
rude produce the distant markets of the world — " thorough taxation" 
being meantime maintained with a view to extinguishment of the public 
debt, and thereby " killing the goose" in the vain hope of " finding the 
golden egg." How far the foreign commerce of the port profits by this 
course of action is shown by the following comparison of the monthly 
exports taken from its columns : — 



1S64. 

478 
21 
38,381 
166,768 
409 
12,987 
1,282,313 
105 
1,353 
37,831 
10,999 
10,577 
1,313 
1,886 
3,929 
10,509 
1,564 
14,876 
2,679 
12,844 
15,745,514 
3,317,125 
2,743,334 
3,265,832 
4,193,548 
1,321,517 



1865. 

516 
58 
32,549 
126,906 



Ashes — Pots, bbls. 
Ashes — Pearls, bbls. 
Beeswax, lb. . 
Wheat flour, bbls. 
Rye flour, " 
Corn meal, " 
Wheat, bush. 

Rye, 

Oats, " 
Peas, " 
Corn, « 
Candles, bxs. 
Coal, tons 
Hay, bales 
Hops, " 
Lard, galls. . 
Linseed, galls. 
Pork, bbls. . 
Beef, " 
Beef, tcs. 
Cut meats, lb. 
Butter, lb. 
Cheese, " 
Lard, " 
Tallow, lb. . 
Petroleum, galls. 

The more abundant the machinery of transport the greater will be the 
quantity of goods transported, and the less the charge for transportation 
3 



14,366 
43,834 
141 
7,560 
6,047 
30,835 
16,403 
3,071 
4,479 
3.844 
2,947 
2,578 
12,222 
4,776 
7,217 
4,354,303 
2,166,137 
4,834,989 
2,954,660 
3,674,420 
630,031 



1866. 

502 
10 
38,001 
117,318 
120 
7,235 
58,226 
25,427 
18,733 
7,761 
551,320 
6,527 
455 
6,088 
107 
2,182 
466 
8,396 
1,991 
4 3 673 
2,193,67 

239,837 
1,538,742 
2,423.345 
1,285,170 
3,086,194 



8 



34 



to the great advantage of producer and consumer, and to the great 
benefit of the governing power. The more perfect the supply of the 
machinery of exchange the more prompt and numerous will the exchanges 
be, and the lower the rate of interest, to the great advantage of both 
public and private revenues. At the present niotnent this latter is greatly 
short, and hence the existence of & paralysis by means of which we are, 
as it is asserted, to reach resumption. To me, however, it appears to be 
the road by which most speedily to attain the point of a disgraceful and 
wholly unnecessary repudiation. 

Believing that careful study of the facts must result in satisfying you 
of the accuracy of the views thus presented, I am, my dear sir, with 
great respect and regard, 

Yours truly, 

H. C. CAREY. 

Philadelphia, February 10, 1866. 



I 

CONCLUSION. 

Dear Sir: — 

Influential Republican journals, by many supposed to represent the 
views of the Administration, are proving daily to the men of intelligence 
and enterprise — those " speculators" who have created the mills, furnaces, 
and mines to which we have stood indebted for power to make the war — 
that not only must they no longer rely upon the co-operation of the 
national authorities, but that they may count securely upon their opposi- 
tion or oppression. 

Appealing constantly to the ignorance, but never to the intelligence, 
of their readers, they denounce such men as belonging to a class whose 
ruin should afford just cause of triumph to all who in the past few years 
have sought to aid their country's cause. 

Crippling those who had commenced the creation of new mills and 
furnaces, they have already closed many of those that had been through- 
out the war at work, and are now most effectually preventing the under- 
taking of any new enterprises tending towards development of our mineral 
wealth, or towards increase of our industrial forces. 

Therefore is it : 

That we are largely and rapidly diminishing the demand for human 
service, and lessening the power of the laborer, the mechanic, and the 
miner to claim reward for labor ; this too being done at the very time 
when thousands and tens of thousands of able-bodied men have been, and 
are being discharged from the public service ; the very time, too, when 



35 

active and earnest men are engaged in an effort to draw from Europe the 
supplies of men required for enabling us to develop our vast resources : 

That we are lessening the demand upon the farmer for the fruits of the 
earth, and compelling him to increased dependence on foreign markets : 

That there is a decline in the power of our people to maintain with 
Britain that competition for the production and sale of cloth and iron to 
which alone can we look for such reduction of their prices as may com- 
pensate the farmer for the burthens of the war : 

That, while reducing the prices of food and labor, we are largely and 
rapidly raising the general rate of interest, thereby enabling those who 
do not work to profit at the cost of those who do : 

That we are making taxation more and more burthensome while lower- 
ing the rate of exchange to the great advantage of those who prefer to 
expend their incomes abroad rather than do the same at home : 

That we are thus daily making it more impossible that our mills and 
furnaces should supply the domestic market ; that those who " live at 
ease" should apply their means to the advantage of those who labor; 
that ships should be built to enter into competition with those of Europe; 
that we should in time of peace extend, or even maintain, that independ- 
ence to which we have been indebted for recent success in war. 

As consequences of all this, we are — 

Supporting abroad, at an estimated annual cost of $100,000,000, a 
hundred thousand of our people engaged in consuming foreign food and 
paying for foreign labor : 

Enabling foreigners to deluge our markets with cloth and iron in the 
production of which have been consumed hundreds of millions of bushels 
of foreign food : 

Maintaining those foreigners in a monopoly of the carrying trade 
between this and Europe, and thus compelling our own people to the 
exclusive use of ships that represent both foreign labor and foreign food : 

Increasing in every manner that can be devised the demand for the 
capital and the skill of Europe while destroying demand for the wonder- 
ful mechanical skill of people at home : 

Raising the prices of all the things we need to buy, money included, 
while lowering those of all that we need to sell, stocks and bonds not 
excepted : 

Buying now, annually, to the extent of hundreds of millions of dol- 
lars more than we have, or are like to have, to sell : 

Exporting every ounce of gold yielded by California : 

Increasing daily the necessity for going abroad to beg for loans, and 
thus adding to a foreign debt that now already exceeds a thousand 
millions of dollars : 

Selling abroad at little more than half price bonds that must, at full 
prices, be redeemed in gold : 



30 



Paying thereon, on the security of the whole property of the Union, a 
rate of interest unknown to any really civilized people of the world; and 
more than thrice the rate at this instant paid by that British government 
with whom we should be now contending for control of the commerce 
of the world : 

Compounding interest by borrowing the money with which to pay it, 
and thereby doubling its amount in less than half a dozen years. 

Such being our present course of operation, it may be not improper 
here to ask the questions : " Why it is that such things should now be 
done V Why is it that we have so entirely abandoned the policy that 
carried us so triumphantly through the war ? Seeking a reply thereto, 
we find it in the fact, that our eyes are closed to the existence of a very 
simple principle whose perfect truth has recently been so fully demon- 
strated as to make it absolutely marvellous that it should now be 
doubted — that principle being embraced in the following words : to wit, 
The power of accumulation exists in the ratio op the rapidity 
of the societary circulation. 

Throughout the war that circulation steadily increased in its rapidity, 
and for the reason that a really national free trade policy created demand 
for labor and its products, a really national system of circulation mean- 
time giving to the internal commerce facilities of exchange such as it 
never before had known. Since the peace, however, we have been travel- 
ling backward, and undoing all that had so well been done — piling up 
taxes on one hand, while, on the other, not only refusing to our people 
the power to create for themselves machinery of circulation, but actually 
frightening home that which previously had been furnished ; doing this, 
too to such extent that the quantity now in use bears to the exchanges 
needed to be performed a proportion that, with the exception of the closing 
years of our most calamitous British free trade periods, is less than has 
ever yet been known. 

The periods thus referred to are the following : — 

I. That one which followed the conclusion, in 1815, of political peace 
with Britain, to be followed by that industrial war which was proclaimed 
by Messrs. Brougham, Hume, and other British liberals, when they an- 
nounced in Parliament their determination to " strangle in the cradle" 
the then growing manufactures of America and of Europe; that one in 
which British hostility to American industry produced a general paralysis 
like to that which is now again so rapidly approaching, and thus enabled 
General Jackson, by aid of his admirable letter to Dr. Coleman, to reach 
the presidential chair: 

II. That one in which bankruptcy of the treasury and general ruin of 
our working men paved the way for expulsion of Mr. Tan Buren from 
the chair of state : 

III. That one in which public and private bankruptcy, civil war, and 



37 



almost universal ruin, were exhibited to the world as the bequest of Mr. 
Buchanan, on his retirement from public life, to the people to whom he 
had stood so much indebted. 

From all this we speedily recovered, doing so by aid of a national free 
trade tariff, and a national medium of circulation. To all of it we are 
now returning, having, by means of internal taxes, almost re-enacted the 
British free trade tariff, and being now engaged in frightening out of use 
even the existing circulation. Let us so continue, and we shall soon be 
called to witness a political revolution quite as thorough as were those 
which drove to private life the two of our public men who, of all others, 
had placed themselves most fully on record as opposed to progress in the 
direction of that substitution for coin of the circulating note by means of 
which the farmeiythe laborer, and the mechanic are brought more nearly 
on a level with the great men who live at their expense — those who build 
palaces by aid of the performance of exchanges to the extent of thou- 
sands of millions without the use of a dollar of coin, and almost without 
being required to use a single note. 

For all this the remedy, my dear sir, is clearly indicated by your present 
action in reference to the fractional currency, of which, as we are informed, 
nearly half a million per week has recently been sent to the Southern 
States. The people of those States needing such notes they are at once 
supplied. Why, however, should they be denied the use of notes of larger 
size, say of one, two, five, ten, or twenty dollars ? Why, even, deny them 
those of a hundred or a thousand dollars ? Why compel them, when 
selling bales of cotton, to accept payment in notes of less than a single 
dollar ? Why not at once furnish them with facilities of exchange by 
means of which they may be enabled promptly to discharge each and 
every engagement they need to make ? Why not do the same with the 
people of the West, thereby enabling the farmer to extend, instead of, 
as now, diminishing his cultivation ? Why not place it in the power of 
our whole people to do as they did two years since, deal for cash with one 
another ? The simple question that, so far as this question of credit is 
concerned, is now to be settled, is, whether throughout the whole country 
our people shall be buying and selling on credit, the poor man every- 
where paying to the rich the ten, twenty, or even thirty per cent, de- 
manded for the use of money; or, whether the treasury shall make itself the 
general debtor to such extent as may enable all to deal for cash, thereby 
placing the poor man more nearly on a level with the rich one. Adopt- 
ing this latter course the treasury will give us once again those facilities 
of exchange to which we have stood indebted for that wonderful rapidity 
of circulation by means of which labor and capital were so much econo- 
mized as to have enabled us to donate to the treasury hundreds of millions, 
while lending it thousands of millions. Adopting the former, we shall 
rapidly return to the position in which, by reason of sluggishness of the 



38 



circulation, labor and capital were annually wasted to an extent greater 
than the whole cost of four years of the most expensive war the world 
has ever seen. By means of the one, we shall so deepen the waiter as to 
enable the treasury ship to float securely, while advancing steadily in the 
direction of resumption ; whereas, by adopting the other, the water must 
from day to day be made more shallow, until at last there will remain to 
us, as our only port, that of repudiation. 

That we may hereafter move in the one here first indicated, all that is 
needed is that the treasury shall make itself once again " master of the 
situation," controlling banks and brokers — excellent servants, but the worst 
of masters — instead of being controlled by them. To that end, let it give 
full consideration to the great fact, that, notwithstanding the density of 
population and consequent diminution of necessity for the use of any 
tangible machinery of exchange, the coin alone in actual use, in Great 
Britain, is nearly equal in amount to the total quantity of that machinery 
here allowed for a population greatly larger, and scattered over almost a 
continent. Let it remark the fact that, trivial as our allowance now is, the 
public mind is kept in a state of continual alarm by means of threats of 
measures of contraction. Let it reflect, that the more perfect the supply 
of that machinery by means of which alone exchanges are made from 
hand to hand, the more rapid must be the increase iu the quantity of that 
required for making exchanges from place to place. Let it see that the 
injurious effect of deficiency in the supply thereof increases geometrically 
as distance from the great centres of commerce increases arithmetically, 
with constant tendency towards production, throughout the South and 
West, of that irritation which, if permitted once again to grow as it has 
in time past done, must result in final dissolution of our Union. Let it 
see, that in supplying that machinery it is therefore doing what is most re- 
quired for producing harmony throughout the Union, while diminishing 
the taxation required for payment of interest on the public debt. Let it 
then grant to the men of the South, as regards exercise of the power to 
create banks, and to supply themselves with machinery of exchange, the 
same freedom that has been already granted to the loyal people of the 
Xorth. I*et it see that with the reincorporation of the South, and con- 
sequent extension of the field of commerce, there has arisen a necessity 
for exchanges greatly more numerous than were required to be performed 
when, two years since, there was found employment for a circulation 
greater by almost one-half, than that which now exists. Finally, let it 
see that the time has come for granting to our people facilities of ex- 
change equal, at least, to those required during the war ; and, that by so 
doing it will at once, and forever, bring to a close the practice of shinning 
it from day to day by aid of those "temporary loans" and "certificates 
of indebtedness" by means of which banks and brokers, at the cost of 
public creditors, are enabled to make enormous profits, the treasury mean- 



39 



while paying for the privilege of thus postponing payment of its debts, to 
the extent of little less than a dozen millions per annum. 

Let these things be done, and then will there at once reappear that 
faith in our future by means of which we had been enabled to make our 
way through the wonderful war that has just now closed. Let them be 
done, and activity aud energy will at once replace the paralysis that now 
so much exists. Let them be done, and there will no longer be a daily 
waste of capital and labor greater in amount than the total public revenue. 
Let them be done, and at once our people will recommence the building 
of houses, mills, and furnaces, thereby making demand for the services of 
the laborer and the products of the farm. Let them be done, and the 
public revenue will so much increase as to enable you to dispense at once 
with all those taxes which now so much impede our internal commerce. 
Let them be done, and the world will soon cease to witness the extraordi- 
nary spectacle of a country flaunting the Monroe Doctrine in the eyes of 
foreign sovereigns, its people meantime besieging every little banking 
house in Europe, seeking thence to draw some small supply of the 
''sinews, of war." Let them be done, and we shall at once re-enter 
upon competition with Britain for control of the commerce of the world. 
Let them be done, and great prosperity will enable our people to more 
and more retain the produce of California mines ; and thus, with profit to 
all and injury to none, gradually to prepare for that resumption which 
both you and I so much desire to see achieved. Let them be done, and 
we shall not only cease, by the export of bonds, to increase our depen- 
dence on Europe, but shall gradually buy back those now held abroad, and 
thus increase our independence. Let them be done, and the great re- 
publican party will continue to control the movements of the great Ship 
of State. Let them be done, and the East and the West, the North and 
the South, will become from day to day more thoroughly knit together, 
the Union thenceforward marching steadily forward towards the occupa- 
tion of that position which its wonderful natural resources, and the ex- 
traordinary intelligence of its people so well entitle it to claim, to wit, 
that of leader of the civilization, and controller of the commerce of the 
world. 

Let them be not done and paralysis, to be followed by financial ruio, 
must pave the way for the destruction of that great party which has 
carried us through the war, but which, by reason of deficiency of courage, 
has thus far failed to give to the country that prosperity in peace for which 
it so well had fought, and had so largely paid. Let them be not done, 
and there will be growing discord, ending in final dissolution of that 
glorious Union in whose behalf so many have fought, bled, and suffered. 
Let them be not done, and the public debt of the Union will, in the esti- 
mation of the world, and that at no very distant period, stand side by 
side with that of the Confederate States. 



40 



The question, my dear sir, now before you for determination is, in my 
belief, the most momentous one ever yet submitted to the decision of a 
single individual. We have just now closed a little internal difficulty, 
leaving yet for settlement the one great question as to whether the world 
is, in all the future, to be subjected to that British and anti-national 
system which has for its especial object that of enabling bankers and 
brokers to enslave the farmers and laborers of the outside world ; or, 
whether the Union shall now place itself in the lead of the now agricul- 
tural nations for resistance to that system, and for relief of the agriculturists 
of the world from the oppressions under which they so long have suffered. 
Contraction, by means of which the price of money is being so rapidly 
carried up, looks in the first of these directions and must result in giving 
the victory to England. Expansion, by means of which there shall be 
re-established the alliance between the treasury and the employers of 
money — farmers, laborers, artisans, and "speculators" — looks in the 
second, and will give the victory to us — health, wealth, strength, and the 
power of accumulation growing always with growth in the rapidity of the 
societary circulation. 

It may, however, be said that gold will rise in price. That for a brief 
period it must do so is very certain. So soon, however, as that rise shall 
have produced the effect of lessening the importations by which we now 
are being inundated, and so soon as we shall have established a small 
counter-current of bonds, it will fall again — that fall continuing until we 
shall have placed ourselves in a position to retain at home the produce 
of California, thereby enabling ourselves quietly and profitably to resume 
the use of the precious metals. 

Begging you now, my dear sir, to excuse my repeated trespasses on 
your attention, and earnestly hoping that you may be guided to a right 
decision, I remain, with sincere regard and respect, 

Yours very truly, 

HENRY C. CAREY. 

Philadelphia, February 17, 1866. 



41 



POSTSCRIPT. 

Dear Sir : — 

In one of the journals of the day I find an article on the subject of 
prices that seems to me worthy of being made the subject of a postscript 
to the letters with whose perusal I have already troubled you. It is as 
follows : — 

" The advance in house rents and in the price of stores and business 
places in the large cities, is attracting general attention. At New York 
the rents paid, and the prices at which favorable locations find purchasers, 
are subjects of almost daily newspaper comment. The same disposition 
to run into high figures is observable here and in all cities, and carries 
with it, to the observant mind, wholesome admonition of the end to which 
it points. At New York, in some fashionable quarters, the proposed rise 
in rents for first-class dwellings is, in many cases, from fifty to seventy-five 
per cent, houses on the Fifth Avenue renting as high as $12,000 a year, 
while in other localities dwellings which last year rented for $3,000 are 
now let for $4,000. The rents of stores are correspondingly increased. 
A store in Broadway, 150 by 25 feet (four stories high), was rented last 
spring for $40,000 a year. Previously for five years the annual rental 
was but $13,000. The lease of a corner store, for $12,000, expires next 
spring, and the owner has fixed on $42,000 a year for the future. The 
half of a fourth floor, 25 by 100 feet, was rented a few days ago for the 
sum of $3,000. A corner basement on Broadway rents for $7,000 a year. 
The Journal of Commerce mentions the following case, illustrative of the 
same extravagant tendency of prices : — 

" ' A dry goods firm have rented a store for the current year at $15,000. 
The owner called on them a few weeks since to ask their intentions for 
another year. They expressed a wish to remain if the terms were agree- 
able. He offered to treat them fairly, and suggested that $40,000 per 
annum for a three years' lease would be a reasonable advance. They in- 
dignantly refused to treat, and he left. After a few hours' search for 
another place, they concluded to pocket their indignation and accede to 
the terms. Calling on the owner for this purpose, they learned that they 
were too late, the premises having been leased for three years at $50,000 
per annum. A further search left them hopeless of securing anything 
more eligible, and they have purchased the lease of the new parties for a 
bonus of $10,000. We do not see how these enormous rents are to be 
met ; but we suppose it " will all come right in the end." In the words 
of a graphic oracle of the market, " if everybody thinks somebody is goiug 
to smash, nobody had better tell anybody about it.' " 



4-2 



" We think with the Newark Advertiser that it is impossible that the 
condition of affairs disclosed in these extracts can long continue. There 
is certainly nothing in the present position of the business of the country 
to justify such an exorbitant appreciation of real estate values. Already 
an apprehension is beginning to prevail in some business circles that a 
crash, induced by natural causes, cannot be much longer postponed ; and 
in any event, it is obvious that should Congress authorize a policy of con- 
traction by the national treasury, a speedy check must be given to the 
present reckless extravagance of prices." 

The "reckless extravagance" here exhibited is, as we are assured, to 
be checked by "a policy of contraction." In opposition to this, how- 
ever, we have the fact, that it follows a " contraction" that has been for 
months in progress — one so serious that it has now reduced the " paper 
money" circulation to an amount actually less, per head, than is the coin 
alone of Great Britain, leaving wholly out of view the hundreds of 
millions of her " paper money," and the thousands of millions of credit 
money by means of which she is enabled to transact countless millions of 
business without the need of either coin or notes. Such being the case, 
may it not, my dear sir, be possible, that the " reckless extravagance" 
here referred to comes as the natural consequence of a " contraction" that 
has largely raised the rate of interest throughout the country — that 
has greatly diminished general confidence — that has caused the present 
paralysis — and that threatens destruction of the internal commerce; and 
that the real remedy is to be found in the pursuit of a course of measures 
tending to the restoration of confidence, such as I have already indicated. 
That it is so you will, as I think, be prepared to admit when you shall 
have accompanied me in a brief review of the various phenomena by 
which the crises of 1837 and 1857 had been preceded, as follows : — 

By aid of our first really national tariff, that of 1828, the country had, 
in 1832, been brought to a state of prosperity such as had never before 
been seen, and the public revenue had so greatly grown as to make it 
necessary to wholly free from impost duties tea, coffee, and very many 
articles of general use. Still, however, the revenue grew, and so largely 
grew as to require that, in order to the absorption of the balance in 
the treasury, the three per cents., held in Holland, should be ex- 
tinguished. As a consequence of this, the year 1835 saw the country 
wholly free from public debt, and almost, if not even entirely, free 
from foreign liabilities of any description, whether those of States or of 
individuals. The seed, however, of a great and destructive foreign debt 
had been already planted, and was destined soon to yield a most abundant 
crop of fruit. By the compromise tariff of 1833 it had been provided, 
that all duties on foreign merchandise should biennially be reduced until, 
in 1842, we should attain the point of a perfectly horizontal tariff of 20 
per cent. From that date the population and its demand for cloth and 



43 



iron steadily increased, but the growth in number of mills, furnaces, and 
mines wholly ceased ; and with every step in that direction there came 
a decline in the demand for domestic labor, and in the domestic com- 
merce. With each, it became more necessary to obtain abroad commodi- 
ties that should have been made at home. Importations, therefore, grew 
rapidly, and the more they grew the greater here became the waste of 
labor and of capital. The more that waste the greater became the 
necessity for looking to Atlantic cities as the only places in which to 
make exchanges, with constant increase in the rents of city stores and 
dwellings until, at length, in the spring of 1837, they had attained a 
point higher than had ever before been known. The day of settlement 
was then, however, close at hand, our foreign credit having, even then, 
somewhat declined. It came soon after, bringing with it almost the anni- 
hilation of city rents, which were not again to attain the point from which 
they then had started, until after the restoration of the domestic commerce 
by means of the protective tariff of 1842. The real and permanent 
interests of city proprietors are thus shown to be in perfect harmony with 
those of mill, mine, and railroad owners, and of those who look for food 
and clothing to employment in such works. 

Coming now to a later period, we find that at the date of the discovery 
of California gold another British free trade crisis had been close at hand. 
For a time the influx of that gold staved it off and caused great increase 
in the rapidity of the societary circulation, the effects of which, as regarded 
our industrial interests, are clearly shown in the following figures repre- 
senting the quantity of anthracite coal then sent to market : — 



1850 
1851 
1852 
1853 



3,321,000 tons. 
4,329,000 " 
4,899,000 " 
5,097,000 " 



1854 
1855 
1856 
1857 



5,831,000 tons. 
6,486,000 " 
6,751,000 " 
6,431,000 " 



From 1850 to 1856, as here is seen, there was a steady upward move- 
ment. The downward one, however, had now commenced, and as a 
necessary consequence of that paralysis of the domestic commerce which 
here exhibits itself in the prices of railroad shares :— 



Baltimore and Ohio . 
Boston and Worcester 
New York and Erie . 
Cleveland and Pittsburg 
Michigan Southern . 
Pennsylvania Central 
Camden and Amboy 
Boston and Maine 

Total 
Average 



1852-3. 


December, 1856. 


. 96 


84}- 


. 105 


83f 


. 85 • 


6U 


. 93 


56| 


. 118 


88£ 


. 93 


94£ 


. 149 


124 


. 102 


77} 


. 843 


670 


. 105f 


83f 



44 



A thousand millions of property had been thus one-fifth deteriorated. 
Why ? Because, that labor was then everywhere being wasted. Because, 
that mills and furnaces were ceasing to work, and mines were being 
abandoned. Because, that artisans and miners were wandering every- 
where in search of employment, coal meanwhile selling in this city for 
$3 50 per ton of 2,240 pounds, or little more than now is charged for 
transporting it less than a single hundred miles on its road to market. 
Because, that credit was then gradually passing away, the price of money 
in our cities meantime ranging between 10 and 20 per cent. Importa- 
tions, however, were immense, and the foreign debt steadily increased, 
the prices of city lots and rents of city houses meanwhile growing with 
its growth until at length they attained a height that, even in 1837, had 
never before been reached. t 

Thus far, as we see, the parallel is perfect between the periods preceding 
the great crises of 1S37 and 1857, domestic paralysis, pauperism of our 
people, waste of capital and labor, and destruction of the value of mill, 
mine, furnace, and railroad property, having gone hand in hand with 
augmentation of the already enormous foreign debt, and increase in the 
price of city lots and rents of city stores and warehouses. May the 
parallel be yet further carried out? Assuredly it may. In both, the 
foreign credit soon became exhausted. In both, city lots and houses fell 
with a rapidity greater even than that which had marked their rise, 
crushing in their fall all whose property had been mortgaged, and thus 
enabling " speculators" for a fall to profit at the cost of those who had 
"speculated" for a rise, the rich being thus made richer as the poor be- 
came poorer. In both, banks stopped payment. In both, importations 
ceased. In both, the public revenue passed almost away, leaving the 
national ship high and dry amid the shoals of bankruptcy. In both, the 
people marked their appreciation of the public servants by expelling from 
offices nearly the whole of those, from doorkeeper to President, who, by 
their war upon the domestic credit and domestic commerce, and by their 
alliance with those " speculators" for a fall who had built no railroads, 
sunk no mines, and employed no labor, had aided in bringing about a 
state of affairs so ruinous to working men of all descriptions, farmers and 
laborers, miners and artisans — and so utterly destructive of the national 
character and the national power. 

Now again, in 1866, do we find the parallel to the periods that preceded 
the great crises of 1837 and 1857. Now again, has the domestic com- 
merce become greatly crippled. Now again, are mines, mills, and furnaces 
idle. Now again, has capital so invested ceased to yield to their owners 
even the smallest profit.* Now again, does decline in the consumption 



* To this cotton and woollen mills furnish exceptions. Why they do so was 
shown in my fifth letter. 



45 



of coal famish evidence of decay of our industrial interests. *Now again, 
do artisans pace our streets vainly seeking to find demand for services 
they would gladly render.* Now again, has railroad property fallen, and, 
notwithstanding our great increase of numbers — notwithstanding the vast 
advantages enjoyed throughout the war by northern roads — notwithstand- 
ing the present enormous rates of freight — so greatly fallen, that they do 
not now command, in " paper money," even the prices at which they sold 
when the early supplies of California gold were so stimulating our domestic 
commerce as largely to increase the demand for coal. In proof of this I 
give here again the prices of the above-named roads, as follows : — 





1S52-3. 


February, 1S66. 






1121 






131 






82 






81£ 






m 






mi 






118 






H8| 






827' 




. . I0'5f 




Average in greenbacks . 




ro3f 



Now again, however, have importations grown, and grown to such a 
height as to have caused astonishment even in the minds of those excellent 
British free traders who did the smuggling of the war. Now again does 
the foreign debt increase at an appalling rate. Now again does the do- 
mestic credit disappear, with large advance in the rate of interest. Now 
again do influential journalists, supposed to represent the views of the 
administration, stand side by side with " speculators" for a fall, denouncing 
those " speculators" for a rise to whom we had been indebted for power 
to make the war ; just as, in 1833, we had to such men been indebted for 
ability to extinguish the public debt; and as, in 1845, we had owed to 
such the power once again to pay interest on the State and other debts 
then held abroad. Now again, too, have the prices and rents of city lots 
and houses attained prodigious elevation — having risen to a point as much 
exceeding that attained in 1857 as does the wonderful rapidity with which 
we now are adding to our foreign debt exceed that exhibited in '37 and 
'57. Then, the annual addition counted by tens of millions only. Now, 
it counts by hundreds of millions. 

The parallel between the preparations for a crisis being thus complete, 
may it not now, as to results, be fully carried out ? Assuredly it may, 

* Ten davs since an advertisement for hands to work in a machine shop of this 
city, brought more than three hundred applications. Since then, hundreds who 
were then at work have been discharged. 



48 



with the difference only, that when the crash shall come it will be more 
thorough and complete than any the world has ever known. Why ? Be- 
cause our banks stand to-day on public stocks and bonds, and nothing 
else. Because our foreign debt is being contracted on the faith of 
treasury promises, compliance with which is wholly dependent upon re- 
ceipts from taxation of a domestic commerce now, and rapidly, becoming 
so entirely paralyzed that it is likely soon almost to cease to have ex- 
istence. To a large extent those taxes have, in the past year, been paid 
out of capital; but to a larger one must they soon cease to be paid at 
all. So soon as these results of our present policy shall have become a 
little more clearly visible, the foreign credit must pass away, and with it 
th^ power to collect, in any manner, whether from the foreign or the 
domestic commerce, sufficient even to meet the annual demand for interest ; 
leaving wholly out of view the thousand millions of floating debt, pay- 
ment of which must then be made — acceptance of other bonds being 
entirely optional with the holders of those which now exist. 

The high city rents of 1836 and 1856 were followed by bankruptcy of 
banks and merchants, ruin to the farmer, and pauperism to the laborer. 
Owing little or nothing, the treasury escaped with little more than loss of 
revenue. Those of 1866 must bring in their train bankruptcy of the one 
universal debtor, that national treasury into which our people have so 
freely poured so large a portion of the profits of the past few years. The 
former crises were followed by political revolutions the most complete. 
The one now impending, if it shall be allowed to come, must bring with it 
disunion and repudiation, and thus enable the South to achieve in peace 
the end for whose attainment they made the war. 

The cause of all the evil now existing, and all that now is threatened, is 
to be found in the fact that threats of a resumption that, under existing 
circumstances, is clearly seen to be entirely impracticable — one that never 
can take place until we shall at least begin to retain the produce of Cali- 
fornia mines — have wholly annihilated that faith in the future to which we 
have been indebted for past success. If we would avoid the dangers with 
which we are now threatened — if we would maintain the Union — that 
faith must be restored. To that end we now need clear and distinct 
action on the part of Congress tending towards remedy of that great mis- 
take of the last session, referred to in my seventh letter, which has already 
cost the country a waste of capital and labor to the full extent of the 
$600,000,000 then ordered to be borrowed, leaving still that vast amount 
a burthen to be carried. Let that error be now corrected. Let the 
treasury borrow from the people the $200,000,000 that they will most 
gladly lend on notes bearing no interest, therewith discharging the float- 
ing debt by which it is embarrassed, and for which it now is paying, of 
annual interest, little less than $12,000,000. Let it arrest the export of 
California gold by retaining in its vaults all that is not required for pay- 



41 



raent of the demands of public creditors. Let it abolish all those taxes 
by which the domestic commerce is being now destroyed, and it will 
speedily find itself enabled once again to feel itself " master of the situa- 
tion," which now it certainly is not. 

Nothing that could here be mentioned would so much rejoice our whole 
people as would a knowledge of the fact that Congress had decided to 
permit them — poor and rich, great and small — to unite in lending to the 
treasury the sum of $200,000,000, receiving in exchange simple promises 
of repayment at the pleasure of the borrower. Effecting such a loan, the 
treasury would be at once enabled to accumulate a store of gold, and 
thus, while enabling our people more readily to pay the diminished taxes, 
begin to move in the direction of resumption. Selling bonds abroad, in 
the hope of being able to re-import the gold of California, is but the 
direct and certain road to repudiation. 

Let the men who made the war now unite together in giving activity 
to the circulation and life to the people, and they will find themselves 
sustained, while the Union will be maintained. Let them continue onward 
in the present false direction and both must be forever lost. 

Once more apologizing for this further trespass upon your time and 
attention, I remain, my dear sir, 

Yours faithfully, 

HENRY C. CAREY. 

Philadelphia, February 17, 1866. 



9 



LIBRARY OF CONGRESS 

020 755 105 3 



